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Irs Form 1040 2010

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Irs Form 1040 2010

Irs form 1040 2010 Publication 80 - Main Content Table of Contents Introduction 1. Irs form 1040 2010 Employer Identification Number (EIN) 2. Irs form 1040 2010 Who Are Employees?Tests. Irs form 1040 2010 Business Owned and Operated by Spouses Farm Crew Leaders 3. Irs form 1040 2010 Employee's Social Security Number (SSN)Registering for SSNVS. Irs form 1040 2010 4. Irs form 1040 2010 Wages and Other CompensationFringe Benefits 5. Irs form 1040 2010 TipsOrdering rule. Irs form 1040 2010 6. Irs form 1040 2010 Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. Irs form 1040 2010 How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. Irs form 1040 2010 8. Irs form 1040 2010 Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. Irs form 1040 2010 Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. Irs form 1040 2010 Wage and Tax StatementsWaiver. Irs form 1040 2010 11. Irs form 1040 2010 Federal Unemployment (FUTA) Tax—U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. Irs form 1040 2010 Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). Irs form 1040 2010 See section 6 and section 7 for more information. Irs form 1040 2010 This publication summarizes employer responsibilities to collect, pay, and report these taxes. Irs form 1040 2010 Whenever the term “United States” is used in this publication, it includes U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. Irs form 1040 2010 This publication also provides employers in the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. Irs form 1040 2010 See section 11 for more information. Irs form 1040 2010 Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. Irs form 1040 2010 This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). Irs form 1040 2010 See Publication 570, Tax Guide for Individuals With Income From U. Irs form 1040 2010 S. Irs form 1040 2010 Possessions, if you need this information. Irs form 1040 2010 This publication also does not include information relating to income tax withholding. Irs form 1040 2010 In U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. Irs form 1040 2010 See Publication 15 (Circular E), for information on U. Irs form 1040 2010 S. Irs form 1040 2010 federal income tax withholding. Irs form 1040 2010 Comments and suggestions. Irs form 1040 2010   We welcome your comments about this publication and your suggestions for future editions. Irs form 1040 2010   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Irs form 1040 2010 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs form 1040 2010 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs form 1040 2010    You can also send us comments from www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/formspubs. Irs form 1040 2010 Click on More Information and then click on Comment on Tax Forms and Publications. Irs form 1040 2010   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Irs form 1040 2010 1. Irs form 1040 2010 Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. Irs form 1040 2010 Its format is 00-0000000. Irs form 1040 2010 It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. Irs form 1040 2010 Use your EIN on all of the items that you send to the IRS and SSA for your business. Irs form 1040 2010 If you do not have an EIN, you may apply for one online. Irs form 1040 2010 Go to IRS. Irs form 1040 2010 gov and click on the Apply for an EIN Online link under Tools. Irs form 1040 2010 You may also apply for an EIN by calling 1-800-829-4933, (U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Irs form 1040 2010 Do not use a social security number (SSN) in place of an EIN. Irs form 1040 2010 If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. Irs form 1040 2010 If you took over another employer's business, do not use that employer's EIN. Irs form 1040 2010 You should have only one EIN. Irs form 1040 2010 If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. Irs form 1040 2010 Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands only) or 267-941-1000 (toll call). Irs form 1040 2010 Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands may call 1-800-829-4059. Irs form 1040 2010 The IRS will tell you which EIN to use. Irs form 1040 2010 For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. Irs form 1040 2010 2. Irs form 1040 2010 Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. Irs form 1040 2010 See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. Irs form 1040 2010 Employee status under common law. Irs form 1040 2010   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. Irs form 1040 2010 This is so even when you give the employee freedom of action. Irs form 1040 2010 What matters is that you have the right to control the details of how the services are performed. Irs form 1040 2010 See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Irs form 1040 2010    Generally, people in business for themselves are not employees. Irs form 1040 2010 For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Irs form 1040 2010 However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Irs form 1040 2010   If an employer-employee relationship exists, it does not matter what it is called. Irs form 1040 2010 The employee may be called an agent or independent contractor. Irs form 1040 2010 It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Irs form 1040 2010 Statutory employees. Irs form 1040 2010   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. Irs form 1040 2010   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. Irs form 1040 2010 a. Irs form 1040 2010   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. Irs form 1040 2010 b. Irs form 1040 2010   A full-time life insurance salesperson who sells primarily for one company. Irs form 1040 2010 c. Irs form 1040 2010   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. Irs form 1040 2010 d. Irs form 1040 2010   A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. Irs form 1040 2010 The orders must be for merchandise for resale or supplies for use in the customer's business. Irs form 1040 2010 The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Irs form 1040 2010 Tests. Irs form 1040 2010   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. Irs form 1040 2010 The service contract states or implies that almost all of the services are to be performed personally by them. Irs form 1040 2010 They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). Irs form 1040 2010 The services are performed on a continuing basis for the same payer. Irs form 1040 2010 Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands only). Irs form 1040 2010   Publication 15-A gives examples of the employer-employee relationship. Irs form 1040 2010 Statutory nonemployees. Irs form 1040 2010   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Irs form 1040 2010 They are generally treated as self-employed for employment tax purposes. Irs form 1040 2010 See Publication 15-A for details. Irs form 1040 2010 H-2A agricultural workers. Irs form 1040 2010   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. Irs form 1040 2010 Treating employees as nonemployees. Irs form 1040 2010   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. Irs form 1040 2010 See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. Irs form 1040 2010 IRS help. Irs form 1040 2010   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Irs form 1040 2010 Voluntary Classification Settlement Program (VCSP). Irs form 1040 2010   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. Irs form 1040 2010 To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Irs form 1040 2010 For more information, visit IRS. Irs form 1040 2010 gov and enter “VCSP” in the search box. Irs form 1040 2010 Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Irs form 1040 2010 See Publication 541, Partnerships, for more details. Irs form 1040 2010 The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Irs form 1040 2010 Exception—Qualified Joint Venture. Irs form 1040 2010   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. Irs form 1040 2010 S. Irs form 1040 2010 Individual Income Tax Return, or joint Form 1040-SS, U. Irs form 1040 2010 S. Irs form 1040 2010 Self-Employment Tax Return—U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. Irs form 1040 2010 See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. Irs form 1040 2010 Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. Irs form 1040 2010 Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. Irs form 1040 2010 For more information on qualified joint ventures, visit IRS. Irs form 1040 2010 gov and enter “qualified joint venture” in the search box. Irs form 1040 2010 Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. Irs form 1040 2010 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. Irs form 1040 2010 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. Irs form 1040 2010 3. Irs form 1040 2010 Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. Irs form 1040 2010 You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. Irs form 1040 2010 If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. Irs form 1040 2010 See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Irs form 1040 2010 Employee's social security card. Irs form 1040 2010   You should ask the employee to show you his or her social security card. Irs form 1040 2010 The employee may show the card if it is available. Irs form 1040 2010 Do not accept a social security card that says “Not valid for employment. Irs form 1040 2010 ” A social security number issued with this legend does not permit employment. Irs form 1040 2010 You may, but you are not required to, photocopy the social security card if the employee provides it. Irs form 1040 2010 If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. Irs form 1040 2010 The employee must complete and sign Form SS-5; it cannot be filed by the employer. Irs form 1040 2010 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. Irs form 1040 2010 If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. Irs form 1040 2010 Enter all zeroes in the SSN field if filing electronically. Irs form 1040 2010 When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. Irs form 1040 2010 Correctly record the employee's name and SSN. Irs form 1040 2010   Record the name and number of each employee as they appear on his or her social security card. Irs form 1040 2010 If the name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Irs form 1040 2010 Continue to use the old name until the employee shows you the replacement social security card with the corrected name. Irs form 1040 2010   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2AS, W-2CM, W-2GU, or W-2VI. Irs form 1040 2010 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. Irs form 1040 2010 Where to get and file social security number application forms. Irs form 1040 2010    U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands—U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. Irs form 1040 2010 Thomas, VI 00802. Irs form 1040 2010  Guam—U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. Irs form 1040 2010  American Samoa—U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. Irs form 1040 2010  Commonwealth of the Northern Mariana Islands—U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. Irs form 1040 2010 Verification of social security numbers. Irs form 1040 2010   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. Irs form 1040 2010 Visit www. Irs form 1040 2010 socialsecurity. Irs form 1040 2010 gov/employer/ssnv. Irs form 1040 2010 htm for more information. Irs form 1040 2010 Registering for SSNVS. Irs form 1040 2010   You must register online and receive authorization from your employer to use SSNVS. Irs form 1040 2010 To register, visit SSA's website at www. Irs form 1040 2010 ssa. Irs form 1040 2010 gov/employer and click on the Business Services Online link. Irs form 1040 2010 Follow the registration instructions to obtain a user identification (ID) and password. Irs form 1040 2010 You will need to provide the following information about yourself and your company. Irs form 1040 2010 Name. Irs form 1040 2010 SSN. Irs form 1040 2010 Date of birth. Irs form 1040 2010 Type of employer. Irs form 1040 2010 EIN. Irs form 1040 2010 Company name, address, and telephone number. Irs form 1040 2010 Email address. Irs form 1040 2010   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Irs form 1040 2010 You must enter the activation code online to use SSNVS. Irs form 1040 2010 4. Irs form 1040 2010 Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands employers). Irs form 1040 2010 However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. Irs form 1040 2010 The wage base for social security tax is $117,000 for 2014. Irs form 1040 2010 After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. Irs form 1040 2010 The wage base for FUTA tax is $7,000 for 2014. Irs form 1040 2010 All wages are subject to Medicare tax. Irs form 1040 2010 The wages may be in cash or in other forms, such as an automobile for personal use. Irs form 1040 2010 Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. Irs form 1040 2010 It does not matter how payments are measured or paid. Irs form 1040 2010 See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. Irs form 1040 2010 See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. Irs form 1040 2010 Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. Irs form 1040 2010 Special rules apply to the reporting of third-party sick pay. Irs form 1040 2010 For details, see Publication 15-A. Irs form 1040 2010 Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. Irs form 1040 2010 However, see Fringe Benefits , later in this section. Irs form 1040 2010 Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. Irs form 1040 2010 Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. Irs form 1040 2010 For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. Irs form 1040 2010 Travel and business expenses. Irs form 1040 2010   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. Irs form 1040 2010 Sick pay. Irs form 1040 2010   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. Irs form 1040 2010 These amounts are sometimes paid by a third party, such as an insurance company. Irs form 1040 2010 In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands employers). Irs form 1040 2010 Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. Irs form 1040 2010 Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. Irs form 1040 2010 Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. Irs form 1040 2010 Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Irs form 1040 2010 In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. Irs form 1040 2010 For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Irs form 1040 2010 When fringe benefits are treated as paid. Irs form 1040 2010   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. Irs form 1040 2010 You do not have to make a formal choice of payment dates or notify the IRS. Irs form 1040 2010 You do not have to use the same basis for all employees. Irs form 1040 2010 You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. Irs form 1040 2010 However, see Special accounting rule for fringe benefits provided during November and December , later in this section. Irs form 1040 2010   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. Irs form 1040 2010 However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. Irs form 1040 2010 This election does not apply to a fringe benefit where real property or investment personal property is transferred. Irs form 1040 2010 Withholding social security and Medicare taxes on fringe benefits. Irs form 1040 2010   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. Irs form 1040 2010   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. Irs form 1040 2010 Depositing taxes on fringe benefits. Irs form 1040 2010   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. Irs form 1040 2010 You may make a reasonable estimate of the value of the fringe benefits. Irs form 1040 2010 In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. Irs form 1040 2010   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. Irs form 1040 2010 If deposits are underpaid, see Deposit Penalties in section 8. Irs form 1040 2010 Valuation of vehicles provided to employees. Irs form 1040 2010    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. Irs form 1040 2010 For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. Irs form 1040 2010 Special accounting rule for fringe benefits provided during November and December. Irs form 1040 2010   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. Irs form 1040 2010 However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. Irs form 1040 2010   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. Irs form 1040 2010 If you use the special accounting rule, your employee must also use it for the same period that you use it. Irs form 1040 2010 You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. Irs form 1040 2010 5. Irs form 1040 2010 Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. Irs form 1040 2010 Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. Irs form 1040 2010 The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Irs form 1040 2010 Both directly and indirectly tipped employees must report tips to you. Irs form 1040 2010 The report should not include tips that the employee paid out to other employees. Irs form 1040 2010 No report is required for months when tips are less than $20. Irs form 1040 2010 Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Irs form 1040 2010 They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. Irs form 1040 2010 Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. Irs form 1040 2010 gov. Irs form 1040 2010 The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. Irs form 1040 2010 You are permitted to establish a system for electronic tip reporting by employees. Irs form 1040 2010 See Regulations section 31. Irs form 1040 2010 6053-1(d). Irs form 1040 2010 Collecting taxes on tips. Irs form 1040 2010   You must collect the employee social security and Medicare taxes on the employee's tips. Irs form 1040 2010 You can also collect these taxes from the employee's wages or from other funds that he or she makes available. Irs form 1040 2010 Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. Irs form 1040 2010 Collect the employee Medicare tax for the whole year on all wages and tips. Irs form 1040 2010   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. Irs form 1040 2010 You are responsible for the employer Medicare tax for the whole year on all wages and tips. Irs form 1040 2010 File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. Irs form 1040 2010 The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. Irs form 1040 2010 Ordering rule. Irs form 1040 2010   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. Irs form 1040 2010 Reporting tips. Irs form 1040 2010   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Irs form 1040 2010 Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Irs form 1040 2010 Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Irs form 1040 2010 The table in section 12 shows how tips are treated for FUTA tax purposes. Irs form 1040 2010   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. Irs form 1040 2010 See Revenue Ruling 2012-18, 2012-26 I. Irs form 1040 2010 R. Irs form 1040 2010 B. Irs form 1040 2010 1032, available at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/irb/2012-26_IRB/ar07. Irs form 1040 2010 html. Irs form 1040 2010 6. Irs form 1040 2010 Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). Irs form 1040 2010 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. Irs form 1040 2010 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. Irs form 1040 2010 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. Irs form 1040 2010 A “share farmer” working for you is not your employee. Irs form 1040 2010 However, the share farmer may be subject to self-employment tax. Irs form 1040 2010 In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. Irs form 1040 2010 For details, see Regulations section 31. Irs form 1040 2010 3121(b)(16)-1. Irs form 1040 2010 The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. Irs form 1040 2010 You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. Irs form 1040 2010 The $150 test applies separately to each farmworker that you employ. Irs form 1040 2010 If you employ a family of workers, each member is treated separately. Irs form 1040 2010 Do not count wages paid by other employers. Irs form 1040 2010 The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. Irs form 1040 2010 Exceptions. Irs form 1040 2010   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Irs form 1040 2010   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. Irs form 1040 2010 7. Irs form 1040 2010 How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. Irs form 1040 2010 2% (amount withheld) each for the employer and employee (12. Irs form 1040 2010 4% total). Irs form 1040 2010 The social security wage base limit is $117,000. Irs form 1040 2010 The tax rate for Medicare is 1. Irs form 1040 2010 45% (amount withheld) each for the employee and employer (2. Irs form 1040 2010 9% total). Irs form 1040 2010 There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Irs form 1040 2010 Multiply each wage payment by these percentages to figure the tax to withhold from employees. Irs form 1040 2010 Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). Irs form 1040 2010 See section 5 for information on tips. Irs form 1040 2010 Additional Medicare Tax withholding. Irs form 1040 2010   In addition to withholding Medicare tax at 1. Irs form 1040 2010 45%, you must withhold a 0. Irs form 1040 2010 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Irs form 1040 2010 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. Irs form 1040 2010 Additional Medicare Tax is only imposed on the employee. Irs form 1040 2010 There is no employer share of Additional Medicare Tax. Irs form 1040 2010 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. Irs form 1040 2010   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. Irs form 1040 2010 For more information on Additional Medicare Tax, visit IRS. Irs form 1040 2010 gov and enter “Additional Medicare Tax” in the search box. Irs form 1040 2010 Deducting the tax. Irs form 1040 2010   Deduct the employee tax from each wage payment. Irs form 1040 2010 If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. Irs form 1040 2010 Employee's portion of taxes paid by employer. Irs form 1040 2010   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. Irs form 1040 2010 This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. Irs form 1040 2010 This again increases the amount of the additional taxes that you must pay. Irs form 1040 2010 Household and agricultural employers. Irs form 1040 2010   This discussion does not apply to household and agricultural employers. Irs form 1040 2010 If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. Irs form 1040 2010 However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. Irs form 1040 2010 See Publication 15-A for details. Irs form 1040 2010 Sick pay payments. Irs form 1040 2010   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Irs form 1040 2010 For details on third-party payers of sick pay, see Publication 15-A. Irs form 1040 2010 8. Irs form 1040 2010 Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. Irs form 1040 2010 You must make the deposit by electronic funds transfer. Irs form 1040 2010 For more information about electronic funds transfers, see How To Deposit , later in this section. Irs form 1040 2010 Payment with Return $2,500 rule. Irs form 1040 2010   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. Irs form 1040 2010   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. Irs form 1040 2010 Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. Irs form 1040 2010 Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. Irs form 1040 2010 Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. Irs form 1040 2010 Semiweekly schedule depositors must timely deposit the amount. Irs form 1040 2010 See Accuracy of Deposits Rule and How To Deposit, later in this section. Irs form 1040 2010 When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. Irs form 1040 2010 Therefore, farm and nonfarm workers are discussed together except where noted. Irs form 1040 2010 Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. Irs form 1040 2010 The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. Irs form 1040 2010 The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). Irs form 1040 2010 You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). Irs form 1040 2010 If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. Irs form 1040 2010 Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. Irs form 1040 2010 Lookback period for employers of nonfarm workers. Irs form 1040 2010   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. Irs form 1040 2010 These four quarters are your lookback period even if you did not report any taxes for any of the quarters. Irs form 1040 2010 For 2014, the lookback period is July 1, 2012, through June 30, 2013. Irs form 1040 2010    Table 1. Irs form 1040 2010 Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. Irs form 1040 2010 1, 2012 Jan. Irs form 1040 2010 1, 2013 Apr. Irs form 1040 2010 1, 2013 through through through through Sep. Irs form 1040 2010 30, 2012 Dec. Irs form 1040 2010 31, 2012 Mar. Irs form 1040 2010 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. Irs form 1040 2010 For example, the lookback period for calendar year 2014 is calendar year 2012. Irs form 1040 2010 In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. Irs form 1040 2010 Lookback period for employers of farmworkers. Irs form 1040 2010   The lookback period for Form 943 is the second calendar year preceding the current calendar year. Irs form 1040 2010 The lookback period for calendar year 2014 is calendar year 2012. Irs form 1040 2010 Adjustments to lookback period taxes. Irs form 1040 2010   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). Irs form 1040 2010 Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. Irs form 1040 2010 Example. Irs form 1040 2010   An employer originally reported total taxes of $45,000 for the lookback period. Irs form 1040 2010 The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. Irs form 1040 2010 The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. Irs form 1040 2010 Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Irs form 1040 2010 For monthly schedule depositors, the deposit period is a calendar month. Irs form 1040 2010 The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Irs form 1040 2010 Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Irs form 1040 2010 You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. Irs form 1040 2010 New employers. Irs form 1040 2010   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. Irs form 1040 2010 Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). Irs form 1040 2010 Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. Irs form 1040 2010 If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. Irs form 1040 2010 Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Irs form 1040 2010 Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Irs form 1040 2010 Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule , discussed later in this section, applies. Irs form 1040 2010 For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 on the following Wednesday. Irs form 1040 2010 If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Irs form 1040 2010 Semiweekly deposit period spanning two quarters. Irs form 1040 2010   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. Irs form 1040 2010 Example. Irs form 1040 2010   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. Irs form 1040 2010 Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Irs form 1040 2010 Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. Irs form 1040 2010   Rose Co. Irs form 1040 2010 reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. Irs form 1040 2010 is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. Irs form 1040 2010 However, for 2014, Rose Co. Irs form 1040 2010 is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. Irs form 1040 2010 Employers of farmworkers. Irs form 1040 2010   Red Co. Irs form 1040 2010 reported taxes on its 2012 Form 943, line 9, of $48,000. Irs form 1040 2010 On its 2013 Form 943, line 11, it reported taxes of $60,000. Irs form 1040 2010   Red Co. Irs form 1040 2010 is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. Irs form 1040 2010 However, for 2015, Red Co. Irs form 1040 2010 is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Irs form 1040 2010 New agricultural employers. Irs form 1040 2010   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. Irs form 1040 2010 However, see the $100,000 Next-Day Deposit Rule , later in this section. Irs form 1040 2010 Deposits on Business Days Only If a deposit due date falls on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Irs form 1040 2010 A business day is any day other than a Saturday, Sunday, or legal holiday. Irs form 1040 2010 For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Irs form 1040 2010 Semiweekly schedule depositors have at least 3 business days to make a deposit. Irs form 1040 2010 If any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the required deposit. Irs form 1040 2010 For example, if a semiweekly schedule depositor accumulated taxes for payments made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Irs form 1040 2010 Legal holiday. Irs form 1040 2010   The term “legal holiday” means any legal holiday in the District of Columbia. Irs form 1040 2010 Legal holidays for 2014 are listed below. Irs form 1040 2010 January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. Irs form 1040 2010 February 17—Washington's Birthday April 16—District of Columbia Emancipation Day May 26—Memorial Day July 4—Independence Day September 1—Labor Day October 13—Columbus Day November 11—Veterans Day November 27—Thanksgiving Day December 25—Christmas Day Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. Irs form 1040 2010 Monthly schedule example. Irs form 1040 2010   Spruce Co. Irs form 1040 2010 is a monthly schedule depositor with seasonal employees. Irs form 1040 2010 It paid wages each Friday during August but did not pay any wages during September. Irs form 1040 2010 Under the monthly deposit schedule, Spruce Co. Irs form 1040 2010 must deposit the combined tax liabilities for the four August paydays by September 15. Irs form 1040 2010 Spruce Co. Irs form 1040 2010 does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. Irs form 1040 2010 Semiweekly schedule example. Irs form 1040 2010   Green, Inc. Irs form 1040 2010 is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Irs form 1040 2010 Although Green, Inc. Irs form 1040 2010 , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. Irs form 1040 2010 The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. Irs form 1040 2010 ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). Irs form 1040 2010 Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. Irs form 1040 2010 $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Irs form 1040 2010 For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. Irs form 1040 2010 For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Irs form 1040 2010 Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Irs form 1040 2010 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. Irs form 1040 2010 For example, Fir Co. Irs form 1040 2010 is a semiweekly schedule depositor. Irs form 1040 2010 On Monday, Fir Co. Irs form 1040 2010 accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. Irs form 1040 2010 On Tuesday, Fir Co. Irs form 1040 2010 accumulates additional taxes of $30,000. Irs form 1040 2010 Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Irs form 1040 2010 does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Irs form 1040 2010 If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. Irs form 1040 2010 Example. Irs form 1040 2010   Elm, Inc. Irs form 1040 2010 started its business on May 1, 2014. Irs form 1040 2010 On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. Irs form 1040 2010 On Friday, May 9, Elm, Inc. Irs form 1040 2010 paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. Irs form 1040 2010 Elm, Inc. Irs form 1040 2010 must deposit $100,000 by Monday, May 12, the next business day. Irs form 1040 2010 Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. Irs form 1040 2010 However, because Elm, Inc. Irs form 1040 2010 accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. Irs form 1040 2010 It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Irs form 1040 2010 Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Irs form 1040 2010 However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Irs form 1040 2010 Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Irs form 1040 2010 Makeup date for deposit shortfall: Monthly schedule depositor. Irs form 1040 2010 Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. Irs form 1040 2010 You may pay the shortfall with your return even if the amount is $2,500 or more. Irs form 1040 2010 Semiweekly schedule depositor. Irs form 1040 2010 Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. Irs form 1040 2010 For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). Irs form 1040 2010 However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. Irs form 1040 2010 In this case, the shortfall must be deposited by April 30, 2014. Irs form 1040 2010 Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes). Irs form 1040 2010 Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. Irs form 1040 2010 If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. Irs form 1040 2010 How To Deposit You must deposit employment taxes by electronic funds transfer. Irs form 1040 2010 See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Irs form 1040 2010 Electronic deposit requirement. Irs form 1040 2010   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Irs form 1040 2010 Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Irs form 1040 2010 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. Irs form 1040 2010   EFTPS is a free service provided by the Department of the Treasury. Irs form 1040 2010 To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands only) or 303-967-5916 (toll call). Irs form 1040 2010 You can also visit the EFTPS website at www. Irs form 1040 2010 eftps. Irs form 1040 2010 gov. Irs form 1040 2010 Additional information about EFTPS is also available in Publication 966. Irs form 1040 2010 When you receive your EIN. Irs form 1040 2010   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. Irs form 1040 2010 You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Irs form 1040 2010 Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. Irs form 1040 2010 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. Irs form 1040 2010 Deposit record. Irs form 1040 2010   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Irs form 1040 2010 The number can be used as a receipt or to trace the payment. Irs form 1040 2010 Depositing on time. Irs form 1040 2010   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Irs form 1040 2010 m. Irs form 1040 2010 Eastern time the day before the date the deposit is due. Irs form 1040 2010 If you use a third party to make deposits on your behalf, they may have different cutoff times. Irs form 1040 2010 Same-day payment option. Irs form 1040 2010   If you fail to initiate a deposit transaction on EFTPS by 8 p. Irs form 1040 2010 m. Irs form 1040 2010 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). Irs form 1040 2010 To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Irs form 1040 2010 Please check with your financial institution regarding availability, deadlines, and costs. Irs form 1040 2010 Your financial institution may charge you a fee for payments made this way. Irs form 1040 2010 To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. Irs form 1040 2010 eftps. Irs form 1040 2010 gov to download the Same-Day Payment Worksheet. Irs form 1040 2010 How to claim credit for overpayments. Irs form 1040 2010   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. Irs form 1040 2010 Do not ask EFTPS to request a refund from the IRS for you. Irs form 1040 2010 Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. Irs form 1040 2010 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. Irs form 1040 2010 The IRS may also waive penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Irs form 1040 2010 For amounts not properly or timely deposited, the penalty rates are as follows. Irs form 1040 2010 2% - Deposits made 1 to 5 days late. Irs form 1040 2010 5% - Deposits made 6 to 15 days late. Irs form 1040 2010 10% - Deposits made 16 or more days late. Irs form 1040 2010 Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. Irs form 1040 2010 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). Irs form 1040 2010 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. Irs form 1040 2010 Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Irs form 1040 2010 Special rule for former Form 944 filers. Irs form 1040 2010    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. Irs form 1040 2010 Order in which deposits are applied. Irs form 1040 2010   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). Irs form 1040 2010 However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Irs form 1040 2010 Follow the instructions on the penalty notice that you received. Irs form 1040 2010 For more information on designating deposits, see Revenue Procedure 2001-58. Irs form 1040 2010 You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/pub/irs-irbs/irb01-50. Irs form 1040 2010 pdf. Irs form 1040 2010 Example. Irs form 1040 2010 Cedar, Inc. Irs form 1040 2010 is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Irs form 1040 2010 It does not make the deposit on July 15. Irs form 1040 2010 On August 15, Cedar, Inc. Irs form 1040 2010 deposits $2,000. Irs form 1040 2010 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. Irs form 1040 2010 Accordingly, $500 of the July 15 liability remains undeposited. Irs form 1040 2010 The penalty on this underdeposit will apply as explained earlier. Irs form 1040 2010 Trust fund recovery penalty. Irs form 1040 2010   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. Irs form 1040 2010 The penalty is the full amount of the unpaid trust fund tax. Irs form 1040 2010 This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Irs form 1040 2010   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. Irs form 1040 2010   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. Irs form 1040 2010 A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Irs form 1040 2010    Willfully means voluntarily, consciously, and intentionally. Irs form 1040 2010 A responsible person acts willfully if the person knows the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Irs form 1040 2010 “Averaged” failure-to-deposit penalty. Irs form 1040 2010   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. Irs form 1040 2010 IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. Irs form 1040 2010 Completed Form 941-SS, line 14, instead of Schedule B (Form 941). Irs form 1040 2010 Failed to attach a properly completed Schedule B (Form 941). Irs form 1040 2010 Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Irs form 1040 2010   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. Irs form 1040 2010 Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Irs form 1040 2010   You can avoid the penalty by reviewing your return before filing it. Irs form 1040 2010 Follow these steps before filing your Form 941-SS. Irs form 1040 2010 If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. Irs form 1040 2010 If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. Irs form 1040 2010 Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. Irs form 1040 2010 Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). Irs form 1040 2010 For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). Irs form 1040 2010 Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. Irs form 1040 2010 If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). Irs form 1040 2010 If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. Irs form 1040 2010 If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. Irs form 1040 2010 9. Irs form 1040 2010 Employer's Returns General instructions. Irs form 1040 2010   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. Irs form 1040 2010 (U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. Irs form 1040 2010 ) Employers with employees subject to U. Irs form 1040 2010 S. Irs form 1040 2010 income tax withholding. Irs form 1040 2010   If you have both employees who are subject to U. Irs form 1040 2010 S. Irs form 1040 2010 income tax withholding and employees who are not subject to U. Irs form 1040 2010 S. Irs form 1040 2010 income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. Irs form 1040 2010 Nonfarm employers. Irs form 1040 2010   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. Irs form 1040 2010 Due dates for each quarter of the calendar year are as follows. Irs form 1040 2010 Quarter Due Jan. Irs form 1040 2010 , Feb. Irs form 1040 2010 , Mar. Irs form 1040 2010 Apr. Irs form 1040 2010 30 Apr. Irs form 1040 2010 , May, June July 31 July, Aug. Irs form 1040 2010 , Sept. Irs form 1040 2010 Oct. Irs form 1040 2010 31 Oct. Irs form 1040 2010 , Nov. Irs form 1040 2010 , Dec. Irs form 1040 2010 Jan. Irs form 1040 2010 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. Irs form 1040 2010 If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. Irs form 1040 2010   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. Irs form 1040 2010 Form 944. Irs form 1040 2010   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). Irs form 1040 2010 Household employers reporting social security and Medicare taxes. Irs form 1040 2010   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). Irs form 1040 2010 Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. Irs form 1040 2010 See Publication 926, Household Employer's Tax Guide, for more information. Irs form 1040 2010 Employers of farmworkers. Irs form 1040 2010   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. Irs form 1040 2010   File a Form 943 each year for all taxable wages paid for farmwork. Irs form 1040 2010 You may report household workers in a private home on a farm operated for profit on Form 943. Irs form 1040 2010 Do not report wages for farmworkers on Form 941-SS or 944. Irs form 1040 2010   Send Form 943 to the IRS by January 31 of the following year. Irs form 1040 2010 Send it with payment of any taxes due that you are not required to deposit. Irs form 1040 2010 If you deposited all taxes when due, you have 10 additional days to file. Irs form 1040 2010 Penalties. Irs form 1040 2010   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. Irs form 1040 2010 The maximum penalty is generally 25% of the tax due. Irs form 1040 2010 Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. Irs form 1040 2010 5% per month of the amount of tax. Irs form 1040 2010 For individual filers only, the failure-to-pay penalty is reduced from 0. Irs form 1040 2010 5% per month to 0. Irs form 1040 2010 25% per month if an installment agreement is in effect. Irs form 1040 2010 You must have filed your return on or before the due date of the return to qualify for the reduced penalty. Irs form 1040 2010 The maximum amount of the failure-to-pay penalty is also 25% of the tax due. Irs form 1040 2010 If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. Irs form 1040 2010 The penalties will not be charged if you have a reasonable cause for failing to file or pay. Irs form 1040 2010 If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. Irs form 1040 2010 Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. Irs form 1040 2010 See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. Irs form 1040 2010 Prior Period Adjustments Forms for prior period adjustments. Irs form 1040 2010   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. Irs form 1040 2010 There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. Irs form 1040 2010 Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. Irs form 1040 2010 Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. Irs form 1040 2010 See Revenue Ruling 2009-39, 2009-52 I. Irs form 1040 2010 R. Irs form 1040 2010 B. Irs form 1040 2010 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. Irs form 1040 2010 You can find Revenue Ruling 2009-39, at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/irb/2009-52_IRB/ar14. Irs form 1040 2010 html. Irs form 1040 2010 Background. Irs form 1040 2010   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. Irs form 1040 2010 Treasury Decision 9405, 2008-32 I. Irs form 1040 2010 R. Irs form 1040 2010 B. Irs form 1040 2010 293, is available at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/irb/2008-32_IRB/ar13. Irs form 1040 2010 html. Irs form 1040 2010 You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. Irs form 1040 2010 You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Irs form 1040 2010 We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. Irs form 1040 2010 Correcting employment taxes. Irs form 1040 2010   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for
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The Irs Form 1040 2010

Irs form 1040 2010 8. Irs form 1040 2010   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. Irs form 1040 2010 Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. Irs form 1040 2010 Introduction This chapter discusses how to pay your U. Irs form 1040 2010 S. Irs form 1040 2010 income tax as you earn or receive income during the year. Irs form 1040 2010 In general, the federal income tax is a pay as you go tax. Irs form 1040 2010 There are two ways to pay as you go. Irs form 1040 2010 Withholding. Irs form 1040 2010 If you are an employee, your employer probably withholds income tax from your pay. Irs form 1040 2010 Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. Irs form 1040 2010 In each case, the amount withheld is paid to the U. Irs form 1040 2010 S. Irs form 1040 2010 Treasury in your name. Irs form 1040 2010 Estimated tax. Irs form 1040 2010 If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Irs form 1040 2010 People who are in business for themselves generally will have to pay their tax this way. Irs form 1040 2010 You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. Irs form 1040 2010 Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Irs form 1040 2010 Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. Irs form 1040 2010 Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. Irs form 1040 2010 S. Irs form 1040 2010 Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. Irs form 1040 2010 S. Irs form 1040 2010 Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. Irs form 1040 2010 S. Irs form 1040 2010 Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. Irs form 1040 2010 Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. Irs form 1040 2010 If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. Irs form 1040 2010 If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. Irs form 1040 2010 If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. Irs form 1040 2010 However, if the income is effectively connected with a U. Irs form 1040 2010 S. Irs form 1040 2010 trade or business, file Form W-8ECI instead. Irs form 1040 2010 Withholding From Compensation The following discussion generally applies only to nonresident aliens. Irs form 1040 2010 Tax is withheld from resident aliens in the same manner as U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. Irs form 1040 2010 Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. Irs form 1040 2010 Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). Irs form 1040 2010 These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). Irs form 1040 2010 Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. Irs form 1040 2010 This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. Irs form 1040 2010 Enter your social security number (SSN) on line 2. Irs form 1040 2010 Do not enter an individual taxpayer identification number (ITIN). Irs form 1040 2010 Check only “Single” marital status on line 3 (regardless of your actual marital status). Irs form 1040 2010 Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. Irs form 1040 2010 S. Irs form 1040 2010 national. Irs form 1040 2010 Write “Nonresident Alien” or “NRA” on the dotted line on line 6. Irs form 1040 2010 You can request additional withholding on line 6 at your option. Irs form 1040 2010 Do not claim “Exempt” withholding status on line 7. Irs form 1040 2010 A U. Irs form 1040 2010 S. Irs form 1040 2010 national is an individual who, although not a U. Irs form 1040 2010 S. Irs form 1040 2010 citizen, owes his or her allegiance to the United States. Irs form 1040 2010 U. Irs form 1040 2010 S. Irs form 1040 2010 nationals include American Samoans, and Northern Mariana Islanders who chose to become U. Irs form 1040 2010 S. Irs form 1040 2010 nationals instead of U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. Irs form 1040 2010 S. Irs form 1040 2010 source scholarship or fellowship grant that is not a payment for services. Irs form 1040 2010 Students and business apprentices from India. Irs form 1040 2010   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. Irs form 1040 2010 You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. Irs form 1040 2010 S. Irs form 1040 2010 taxpayer's 2013 return. Irs form 1040 2010 You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 Household employees. Irs form 1040 2010   If you work as a household employee, your employer does not have to withhold income tax. Irs form 1040 2010 However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. Irs form 1040 2010 The agreement goes into effect when your employer accepts the agreement by beginning the withholding. Irs form 1040 2010 You or your employer may end the agreement by letting the other know in writing. Irs form 1040 2010 Agricultural workers. Irs form 1040 2010   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. Irs form 1040 2010 However, your employer will withhold income tax only if you and your employer agree to withhold. Irs form 1040 2010 In that case, you must provide your employer with a properly completed Form W-4. Irs form 1040 2010 You can find more information about not having tax withheld at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Irs form 1040 2010 Wages Exempt From Withholding Wages that are exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 income tax under an income tax treaty are generally exempt from withholding. Irs form 1040 2010 For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. Irs form 1040 2010 Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands may be exempt from withholding. Irs form 1040 2010 The following paragraphs explain these exemptions. Irs form 1040 2010 Residents of Canada or Mexico engaged in transportation-related employment. Irs form 1040 2010   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. Irs form 1040 2010 These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. Irs form 1040 2010    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. Irs form 1040 2010   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. Irs form 1040 2010 S. Irs form 1040 2010 citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. Irs form 1040 2010   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. Irs form 1040 2010 Residents of American Samoa and Puerto Rico. Irs form 1040 2010   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. Irs form 1040 2010 Residents of the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands. Irs form 1040 2010   Nonresident aliens who are bona fide residents of the U. Irs form 1040 2010 S Virgin Islands are not subject to withholding of U. Irs form 1040 2010 S. Irs form 1040 2010 tax on income earned while temporarily employed in the United States. Irs form 1040 2010 This is because those persons pay their income tax to the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands. Irs form 1040 2010 To avoid having tax withheld on income earned in the United States, bona fide residents of the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands and expect to pay tax on all income to the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands. Irs form 1040 2010 Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. Irs form 1040 2010 You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. Irs form 1040 2010 You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. Irs form 1040 2010 Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. Irs form 1040 2010 S. Irs form 1040 2010 income tax. Irs form 1040 2010 Include them in taxable income. Irs form 1040 2010 In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. Irs form 1040 2010 Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. Irs form 1040 2010 However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. Irs form 1040 2010 An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. Irs form 1040 2010 You must agree to timely file an income tax return for the current tax year. Irs form 1040 2010 Central withholding agreements. Irs form 1040 2010   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. Irs form 1040 2010 Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. Irs form 1040 2010   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. Irs form 1040 2010 Either you or your authorized representative can file the form. Irs form 1040 2010 It should be sent to the IRS at least 45 days before the tour begins or the event occurs. Irs form 1040 2010 Exceptions will be considered on a case by case basis. Irs form 1040 2010   For more information on the CWA program, go to www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. Irs form 1040 2010 Final payment exemption. Irs form 1040 2010   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. Irs form 1040 2010 This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. Irs form 1040 2010 To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. Irs form 1040 2010 A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. Irs form 1040 2010 Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Irs form 1040 2010 A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. Irs form 1040 2010 This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Irs form 1040 2010 A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. Irs form 1040 2010 The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. Irs form 1040 2010 The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. Irs form 1040 2010 Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. Irs form 1040 2010 A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. Irs form 1040 2010   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. Irs form 1040 2010 Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. Irs form 1040 2010   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. Irs form 1040 2010 You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. Irs form 1040 2010 Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). Irs form 1040 2010 To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. Irs form 1040 2010 S. Irs form 1040 2010 national and are not a resident of Canada, Mexico, or South Korea. Irs form 1040 2010 For purposes of 30% withholding, the exemption is prorated at $10. Irs form 1040 2010 82 a day in 2014 for the period that labor or personal services are performed in the United States. Irs form 1040 2010 To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. Irs form 1040 2010 Example. Irs form 1040 2010 Eric Johannsen, who is a resident of Country X worked under a contract with a U. Irs form 1040 2010 S. Irs form 1040 2010 firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. Irs form 1040 2010 He earned $6,000 for the services performed (not considered wages) in the United States. Irs form 1040 2010 Eric is married and has three dependent children. Irs form 1040 2010 His wife is not employed and has no income subject to U. Irs form 1040 2010 S. Irs form 1040 2010 tax. Irs form 1040 2010 The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. Irs form 1040 2010 82), and withholding at 30% is applied against the balance. Irs form 1040 2010 Thus, $1,475. Irs form 1040 2010 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). Irs form 1040 2010 U. Irs form 1040 2010 S. Irs form 1040 2010 nationals or residents of Canada, Mexico, or South Korea. Irs form 1040 2010   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. Irs form 1040 2010 However, if you are a U. Irs form 1040 2010 S. Irs form 1040 2010 national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 For the 30% (or lower treaty) rate withholding, you can take $10. Irs form 1040 2010 82 per day for each allowable exemption in 2014. Irs form 1040 2010 If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. Irs form 1040 2010 However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . Irs form 1040 2010 Students and business apprentices from India. Irs form 1040 2010   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Irs form 1040 2010 S. Irs form 1040 2010 taxpayer's 2014 return. Irs form 1040 2010 You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. Irs form 1040 2010 82 per day for each allowable exemption in 2014. Irs form 1040 2010 Refund of Taxes Withheld in Error Multi-level marketing. Irs form 1040 2010   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. Irs form 1040 2010 You must also attach to the U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return or claim for refund supporting information that includes, but is not limited to, the following items. Irs form 1040 2010 A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. Irs form 1040 2010 A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. Irs form 1040 2010 S. Irs form 1040 2010 taxation. Irs form 1040 2010 A statement listing all the dates you entered and left the United States during the taxable year. Irs form 1040 2010 If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. Irs form 1040 2010 A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. Irs form 1040 2010 A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. Irs form 1040 2010 Any further relevant document or record supporting your claim that the taxes were withheld in error. Irs form 1040 2010 Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. Irs form 1040 2010 It also includes 85% of social security benefits paid to nonresident aliens. Irs form 1040 2010 Refund of taxes withheld in error on social security benefits paid to resident aliens. Irs form 1040 2010   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. Irs form 1040 2010 For U. Irs form 1040 2010 S. Irs form 1040 2010 income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Irs form 1040 2010 See Green Card Test in chapter 1. Irs form 1040 2010 If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Irs form 1040 2010 SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Irs form 1040 2010 If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Irs form 1040 2010 You must also attach the following to your Form 1040 or 1040A. Irs form 1040 2010 A copy of Form SSA-1042S, Social Security Benefit Statement. Irs form 1040 2010 A copy of the “green card. Irs form 1040 2010 ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. Irs form 1040 2010 S. Irs form 1040 2010 lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Irs form 1040 2010 I am filing a U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return for the tax year as a resident alien reporting all of my worldwide income. Irs form 1040 2010 I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. Irs form 1040 2010 Other income not subject to withholding of 30% (or lower treaty) rate. Irs form 1040 2010   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. Irs form 1040 2010 Income (other than compensation) that is effectively connected with your U. Irs form 1040 2010 S. Irs form 1040 2010 trade or business. Irs form 1040 2010 Income from real property that you choose to treat as effectively connected with a U. Irs form 1040 2010 S. Irs form 1040 2010 trade or business. Irs form 1040 2010 See Income From Real Property in chapter 4 for details about this choice. Irs form 1040 2010   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. Irs form 1040 2010 Tax Withheld on Partnership Income If you are a foreign partner in a U. Irs form 1040 2010 S. Irs form 1040 2010 or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. Irs form 1040 2010 You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. Irs form 1040 2010 Generally, you must use Form 8804-C for this purpose. Irs form 1040 2010 See the Instructions for Form 8804-C for more information. Irs form 1040 2010 The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. Irs form 1040 2010 6% for 2014). Irs form 1040 2010 However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. Irs form 1040 2010 Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. Irs form 1040 2010 Claim the tax withheld as a credit on your 2014 Form 1040NR. Irs form 1040 2010 The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Irs form 1040 2010 A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. Irs form 1040 2010 In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. Irs form 1040 2010 S. Irs form 1040 2010 Source Income Subject to Withholding. Irs form 1040 2010 Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. Irs form 1040 2010 See chapter 3. Irs form 1040 2010 If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. Irs form 1040 2010 S. Irs form 1040 2010 source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. Irs form 1040 2010 However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. Irs form 1040 2010 Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. Irs form 1040 2010 Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). Irs form 1040 2010 Use the following instructions instead of the Form W-4 instructions to complete the worksheet. Irs form 1040 2010 Line A. Irs form 1040 2010   Enter the total of the following amounts on line A. Irs form 1040 2010 Personal exemption. Irs form 1040 2010   Include the prorated part of your allowable personal exemption. Irs form 1040 2010 Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. Irs form 1040 2010 82). Irs form 1040 2010 Expenses. Irs form 1040 2010   Include expenses that will be deductible on your return. Irs form 1040 2010 These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. Irs form 1040 2010 They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. Irs form 1040 2010 Nontaxable grant or scholarship. Irs form 1040 2010   Include the part of your grant or scholarship that is not taxable under U. Irs form 1040 2010 S. Irs form 1040 2010 law or under a tax treaty. Irs form 1040 2010 Line B. Irs form 1040 2010   Enter -0- unless the following paragraph applies to you. Irs form 1040 2010   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. Irs form 1040 2010 The standard deduction amount for 2013 is $6,100. Irs form 1040 2010 Lines C and D. Irs form 1040 2010   Enter -0- on both lines unless the following paragraphs apply to you. Irs form 1040 2010   If you are a resident of Canada, Mexico, South Korea, or a U. Irs form 1040 2010 S. Irs form 1040 2010 national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. Irs form 1040 2010   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Irs form 1040 2010 S. Irs form 1040 2010 taxpayer's 2014 return. Irs form 1040 2010 You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010   Enter any additional amount for your spouse on line C. Irs form 1040 2010 Enter any additional amount for your dependents on line D. Irs form 1040 2010 Lines E, F, and G. Irs form 1040 2010   No entries should be made on lines E, F, and G. Irs form 1040 2010 Line H. Irs form 1040 2010   Add the amounts on lines A through D and enter the total on line H. Irs form 1040 2010 Form W-4. Irs form 1040 2010   Complete lines 1 through 4 of Form W-4. Irs form 1040 2010 Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. Irs form 1040 2010   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return to be allowed the exemptions and deductions you claimed on that form. Irs form 1040 2010 If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return for the previous year. Irs form 1040 2010 If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return when required. Irs form 1040 2010 After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. Irs form 1040 2010 The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. Irs form 1040 2010 You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. Irs form 1040 2010 Use this form to prepare your annual U. Irs form 1040 2010 S. Irs form 1040 2010 income tax return. Irs form 1040 2010 Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. Irs form 1040 2010 Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. Irs form 1040 2010 File Form W-8BEN for income that is not personal services income. Irs form 1040 2010 File Form 8233 for personal services income as discussed next. Irs form 1040 2010 Employees and independent contractors. Irs form 1040 2010   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. Irs form 1040 2010   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. Irs form 1040 2010 This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. Irs form 1040 2010 In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. Irs form 1040 2010 Students, teachers, and researchers. Irs form 1040 2010   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. Irs form 1040 2010 For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. Irs form 1040 2010   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. Irs form 1040 2010 Special events and promotions. Irs form 1040 2010   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. Irs form 1040 2010 Form 13930 is used to request a reduction in withholding. Irs form 1040 2010 Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. Irs form 1040 2010 One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. Irs form 1040 2010 You will be required to pay U. Irs form 1040 2010 S. Irs form 1040 2010 tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. Irs form 1040 2010 For more details on treaty provisions that apply to compensation, see Publication 901. Irs form 1040 2010 Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. Irs form 1040 2010 A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest by the shareholder is subject to withholding at 35%. Irs form 1040 2010 Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. Irs form 1040 2010 These rules are covered in Publication 515. Irs form 1040 2010 For information on the tax treatment of dispositions of U. Irs form 1040 2010 S. Irs form 1040 2010 real property interests, see Real Property Gain or Loss in chapter 4. Irs form 1040 2010 If you are a partner in a domestic partnership, and the partnership disposes of a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. Irs form 1040 2010 Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. Irs form 1040 2010 S. Irs form 1040 2010 Source Income Subject to Withholding (in the case of a publicly traded partnership). Irs form 1040 2010 Withholding is not required in the following situations. Irs form 1040 2010 The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. Irs form 1040 2010 The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. Irs form 1040 2010 However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. Irs form 1040 2010 The property disposed of is an interest in a U. Irs form 1040 2010 S. Irs form 1040 2010 corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest. Irs form 1040 2010 You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. Irs form 1040 2010 S. Irs form 1040 2010 taxpayer identification number, and home address. Irs form 1040 2010 You can give the certification to a qualified substitute. Irs form 1040 2010 The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. Irs form 1040 2010 For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. Irs form 1040 2010 The buyer receives a withholding certificate from the Internal Revenue Service. Irs form 1040 2010 You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. Irs form 1040 2010 S. Irs form 1040 2010 tax treaty. Irs form 1040 2010 The buyer must file a copy of the notice with the Ogden Service Center, P. Irs form 1040 2010 O. Irs form 1040 2010 Box 409101, Ogden, UT 84409. Irs form 1040 2010 You must verify the notice as true and sign it under penalties of perjury. Irs form 1040 2010 The notice must contain the following information. Irs form 1040 2010 A statement that the notice is a notice of nonrecognition under regulation section 1. Irs form 1040 2010 1445-2(d)(2). Irs form 1040 2010 Your name, taxpayer identification number, and home address. Irs form 1040 2010 A statement that you are not required to recognize any gain or loss on the transfer. Irs form 1040 2010 A brief description of the transfer. Irs form 1040 2010 A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. Irs form 1040 2010 You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. Irs form 1040 2010 Instead, a withholding certificate (described next) must be obtained. Irs form 1040 2010 The amount you realize on the transfer of a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest is zero. Irs form 1040 2010 The property is acquired by the United States, a U. Irs form 1040 2010 S. Irs form 1040 2010 state or possession, a political subdivision, or the District of Columbia. Irs form 1040 2010 The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. Irs form 1040 2010 S. Irs form 1040 2010 real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. Irs form 1040 2010 For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. Irs form 1040 2010 See Wash sale under Real Property Gain or Loss in chapter 4. Irs form 1040 2010 The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. Irs form 1040 2010 This also applies to the qualified substitute's statement under (4). Irs form 1040 2010 Withholding certificates. Irs form 1040 2010   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. Irs form 1040 2010 Either you or the buyer can request a withholding certificate. Irs form 1040 2010   A withholding certificate can be issued due to any of the following. Irs form 1040 2010 The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. Irs form 1040 2010 All of your realized gain is exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 tax. Irs form 1040 2010 You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. Irs form 1040 2010   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. Irs form 1040 2010 Credit for tax withheld. Irs form 1040 2010   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. Irs form 1040 2010 S. Irs form 1040 2010 Withholding Tax Return for Dispositions by Foreign Persons of U. Irs form 1040 2010 S. Irs form 1040 2010 Real Property Interests. Irs form 1040 2010 This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Irs form 1040 2010 S. Irs form 1040 2010 Real Property Interests. Irs form 1040 2010 Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). Irs form 1040 2010 You must file Copy B with your tax return to take credit for the tax withheld. Irs form 1040 2010   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. Irs form 1040 2010 The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. Irs form 1040 2010 When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. Irs form 1040 2010 Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. Irs form 1040 2010 Your payments of these taxes contribute to your coverage under the U. Irs form 1040 2010 S. Irs form 1040 2010 social security system. Irs form 1040 2010 Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. Irs form 1040 2010 In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. Irs form 1040 2010 All taxable wages are subject to Medicare tax. Irs form 1040 2010 Your employer deducts these taxes from each wage payment. Irs form 1040 2010 Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. Irs form 1040 2010 You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. Irs form 1040 2010 40. Irs form 1040 2010 Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. Irs form 1040 2010 If any one employer deducted more than $7,049. Irs form 1040 2010 40, you cannot claim a credit for that amount. Irs form 1040 2010 Ask your employer to refund the excess. Irs form 1040 2010 If your employer does not refund the excess, you can file a claim for refund using Form 843. Irs form 1040 2010 In general, U. Irs form 1040 2010 S. Irs form 1040 2010 social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. Irs form 1040 2010 In limited situations, these taxes apply to wages for services performed outside the United States. Irs form 1040 2010 Your employer should be able to tell you if social security and Medicare taxes apply to your wages. Irs form 1040 2010 You cannot make voluntary payments if no taxes are due. Irs form 1040 2010 Additional Medicare Tax. Irs form 1040 2010   Beginning in 2013, in addition to the Medicare tax, a 0. Irs form 1040 2010 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. Irs form 1040 2010   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. Irs form 1040 2010 Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Irs form 1040 2010   Your employer is responsible for withholding the 0. Irs form 1040 2010 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. Irs form 1040 2010 If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. Irs form 1040 2010   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Irs form 1040 2010    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Irs form 1040 2010 For more information on Additional Medicare Tax, go to IRS. Irs form 1040 2010 gov and enter “Additional Medicare Tax” in the search box. Irs form 1040 2010   Self-employed individuals may also be required to pay Additional Medicare Tax. Irs form 1040 2010 See Self-Employment Tax , later. Irs form 1040 2010 Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. Irs form 1040 2010 This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. Irs form 1040 2010 These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. Irs form 1040 2010 Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. Irs form 1040 2010 Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. Irs form 1040 2010 Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. Irs form 1040 2010 In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. Irs form 1040 2010 Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. Irs form 1040 2010 Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. Irs form 1040 2010 The U. Irs form 1040 2010 S. Irs form 1040 2010 Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. Irs form 1040 2010 S. Irs form 1040 2010 resident. Irs form 1040 2010 On-campus work means work performed on the school's premises. Irs form 1040 2010 On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. Irs form 1040 2010 On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. Irs form 1040 2010 Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. Irs form 1040 2010 If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Irs form 1040 2010 Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. Irs form 1040 2010 Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. Irs form 1040 2010 If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Irs form 1040 2010 Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. Irs form 1040 2010 The employer must be the petitioner through whom the alien obtained the “Q” visa. Irs form 1040 2010 Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. Irs form 1040 2010 Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Irs form 1040 2010 If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Irs form 1040 2010 Attach the following items to Form 843. Irs form 1040 2010 A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. Irs form 1040 2010 A copy of your visa. Irs form 1040 2010 Form I-94 (or other documentation showing your dates of arrival or departure). Irs form 1040 2010 If you have an F-1 visa, documentation showing permission to work in the U. Irs form 1040 2010 S. Irs form 1040 2010 If you have a J-1 visa, documentation showing permission to work in the U. Irs form 1040 2010 S. Irs form 1040 2010 If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. Irs form 1040 2010 S. Irs form 1040 2010 A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. Irs form 1040 2010 If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. Irs form 1040 2010 If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. Irs form 1040 2010 File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. Irs form 1040 2010 Do not use Form 843 to request a refund of Additional Medicare Tax. Irs form 1040 2010 If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. Irs form 1040 2010 If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. Irs form 1040 2010 S. Irs form 1040 2010 Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. Irs form 1040 2010 See the Instructions for Form 1040X. Irs form 1040 2010 Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. Irs form 1040 2010 You can find more information about not having tax withheld at www. Irs form 1040 2010 irs. Irs form 1040 2010 gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Irs form 1040 2010 Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. Irs form 1040 2010 Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. Irs form 1040 2010 S. Irs form 1040 2010 social security system. Irs form 1040 2010 Residents of the U. Irs form 1040 2010 S. Irs form 1040 2010 Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. Irs form 1040 2010 S. Irs form 1040 2010 residents for this purpose and are subject to the self-employment tax. Irs form 1040 2010 Resident aliens must pay self-employment tax under the same rules that apply to U. Irs form 1040 2010 S. Irs form 1040 2010 citizens. Irs form 1040 2010 However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. Irs form 1040 2010 Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. Irs form 1040 2010 Example. Irs form 1040 2010 Bill Jones is an author engaged in the business of writing books. Irs form 1040 2010 Bill had several books published in a foreign country while he was a citizen and resident of that country. Irs form 1040 2010 During 2013, Bill entered the United States as a resident alien. Irs form 1040 2010 After becoming a U. Irs form 1040 2010 S. Irs form 1040 2010 resident, he continued to receive royalties from his foreign publisher. Irs form 1040 2010 Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). Irs form 1040 2010 Bill's 2013 self-employment income includes the royalties received after he became a U. Irs form 1040 2010 S. Irs form 1040 2010 resident even though the books were published while he was a nonresident alien. Irs form 1040 2010 This royalty income is subject to self-employment tax. Irs form 1040 2010 Reporting self-employment tax. Irs form 1040 2010   Use Schedule SE (Form 1040) to report and figure your self-employment tax. Irs form 1040 2010 Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. Irs form 1040 2010 Attach Schedule SE to Form 1040 or Form 1040NR. Irs form 1040 2010 Additional Medicare Tax. Irs form 1040 2010   Self-employed individuals must pay a 0. Irs form 1040 2010 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. Irs form 1040 2010   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. Irs form 1040 2010 A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Irs form 1040 2010   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Irs form 1040 2010 For more information on Additional Medicare Tax, go to IRS. Irs form 1040 2010 gov and enter “Additional Medicare Tax” in the search box. Irs form 1040 2010 Deduction for employer-equivalent portion of self-employment tax. Irs form 1040 2010   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. Irs form 1040 2010 This deduction is figured on Schedule SE (Form 1040). Irs form 1040 2010 Note. Irs form 1040 2010 No portion of the Additional Medicare Tax is deductible for self-employment tax. Irs form 1040 2010 More information. Irs form 1040 2010   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. Irs form 1040 2010 International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. Irs form 1040 2010 These agreements are commonly referred to as totalization agreements. Irs form 1040 2010 Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. Irs form 1040 2010 The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. Irs form 1040 2010 Agreements are in effect with the following countries. Irs form 1040 2010 Australia. Irs form 1040 2010 Austria. Irs form 1040 2010 Belgium. Irs form 1040 2010 Canada. Irs form 1040 2010 Chile. Irs form 1040 2010 Czech Republic. Irs form 1040 2010 Denmark. Irs form 1040 2010 Finland. Irs form 1040 2010 France. Irs form 1040 2010 Germany. Irs form 1040 2010 Greece. Irs form 1040 2010 Ireland. Irs form 1040 2010 Italy. Irs form 1040 2010 Japan. Irs form 1040 2010 Korea, South. Irs form 1040 2010 Luxembourg. Irs form 1040 2010 The Netherlands. Irs form 1040 2010 Norway. Irs form 1040 2010 Poland. Irs form 1040 2010 Portugal. Irs form 1040 2010 Spain. Irs form 1040 2010 Sweden. Irs form 1040 2010 Switzerland. Irs form 1040 2010 The United Kingdom. Irs form 1040 2010 Agreements with other countries are expected to enter into force in the future. Irs form 1040 2010 Employees. Irs form 1040 2010   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. Irs form 1040 2010 However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. Irs form 1040 2010 You can get more information on any agreement by contacting the U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration at the address given later. Irs form 1040 2010 If you have access to the Internet, you can get more information at www. Irs form 1040 2010 socialsecurity. Irs form 1040 2010 gov/international. Irs form 1040 2010   To establish that your pay is subject only to foreign social security taxes and is exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. Irs form 1040 2010 This will usually be the same agency to which you or your employer pays your foreign social security taxes. Irs form 1040 2010 The foreign agency will be able to tell you what information is needed for them to issue the certificate. Irs form 1040 2010 Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 social security taxes. Irs form 1040 2010 Only wages paid on or after the effective date of the agreement can be exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 social security taxes. Irs form 1040 2010    Some of the countries with which the United States has agreements will not issue certificates of coverage. Irs form 1040 2010 In this case, either you or your employer should request a statement that your wages are not covered by the U. Irs form 1040 2010 S. Irs form 1040 2010 social security system. Irs form 1040 2010 Request the statement from the following address. Irs form 1040 2010 U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration Office of International Programs P. Irs form 1040 2010 O. Irs form 1040 2010 Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. Irs form 1040 2010   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. Irs form 1040 2010 However, under some agreements, you may be exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 self-employment tax if you temporarily transfer your business activity to or from the United States. Irs form 1040 2010   If you believe that your self-employment income is subject only to U. Irs form 1040 2010 S. Irs form 1040 2010 self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration at the address given earlier. Irs form 1040 2010 This certificate will establish your exemption from foreign social security taxes. Irs form 1040 2010   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. Irs form 1040 2010 S. Irs form 1040 2010 self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. Irs form 1040 2010 If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. Irs form 1040 2010 S. Irs form 1040 2010 social security system. Irs form 1040 2010 Request it from the U. Irs form 1040 2010 S. Irs form 1040 2010 Social Security Administration at the address given earlier. Irs form 1040 2010 Attach a photocopy of either statement to Form 1040 each year you are exempt. Irs form 1040 2010 Also print “Exempt, see attached statement” on the line for self-employment tax. Irs form 1040 2010 Estimated Tax Form 1040-ES (NR) You may have income from which no U. Irs form 1040 2010 S. Irs form 1040 2010 income tax is withheld. Irs form 1040 2010 Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. Irs form 1040 2010 If so, you may have to pay estimated tax. Irs form 1040 2010 Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). Irs form 1040 2010 If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. Irs form 1040 2010 Item (2) does not apply if you did not file a 2013 return. Irs form 1040 2010 A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. Irs form 1040 2010 If you pay by check, make it payable to the "United States Treasury. Irs form 1040 2010 " How to estimate your tax for 2014. Irs form 1040 2010   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. Irs form 1040 2010 If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. Irs form 1040 2010 Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. Irs form 1040 2010 Note. Irs form 1040 2010 If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). Irs form 1040 2010 When to pay estimated tax. Irs form 1040 2010   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. Irs form 1040 2010 If you have wages subject to the same withholding rules that apply to U. Irs form 1040 2010 S. Irs form 1040 2010 citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. Irs form 1040 2010 If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. Irs form 1040 2010   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. Irs form 1040 2010 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. Irs form 1040 2010 15, 2014 4th installment Jan. Irs form 1040 2010 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. Irs form 1040 2010    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. Irs form 1040 2010 Fiscal year. Irs form 1040 2010   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. Irs form 1040 2010 If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. Irs form 1040 2010 Changes in income, deductions, or exemptions. Irs form 1040 2010   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. Irs form 1040 2010 This can happen if you receive additional income or if any of your deductions are reduced or eliminated. Irs form 1040 2010 If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. Irs form 1040 2010 Amended estimated tax. Irs form 1040 2010   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. Irs form 1040 2010 To do this, see the instructions for Form 1040-ES (NR) and Publication 505. Irs form 1040 2010 Penalty for failure to pay estimated income tax. Irs form 1040 2010   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. Irs form 1040 2010 These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Irs form 1040 2010 Prev  Up  Next   Home   More Online Publications