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Taxact 2012 Return

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Taxact 2012 Return

Taxact 2012 return There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail. Taxact 2012 return Taxact 2012 return If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes when filing Form 4868 electronically, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. Several companies offer free filing of Form 4868 through the Free File program that you can access on the IRS.gov website. If you wish to file electronically, be sure to have a copy of last year's tax return. You will be asked to provide the adjusted gross income (AGI) from the return for taxpayer verification. Taxact 2012 return Taxact 2012 return A second way of requesting an automatic extension of time to file your individual income tax return is to pay part or your entire estimated income tax due by credit card or debit card or by using EFTPS. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records. Taxact 2012 return Taxact 2012 return Finally, you can request an automatic extension of time to file your individual income tax return by completing paper Form 4868 and mailing it to the appropriate address provided on the form. Taxact 2012 return Taxact 2012 return Please be aware that an extension of time to file is NOT an extension of time to pay.

Publication 17 (2013), Your Federal Income Tax

For Individuals

For use in preparing 2013 Returns


Table of Contents


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The Taxact 2012 Return

Taxact 2012 return 6. Taxact 2012 return   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. Taxact 2012 return Reporting Tips to Your EmployerElectronic tip statement. Taxact 2012 return Final report. Taxact 2012 return Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. Taxact 2012 return All tips you receive are income and are subject to federal income tax. Taxact 2012 return You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. Taxact 2012 return The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. Taxact 2012 return Reporting your tip income correctly is not difficult. Taxact 2012 return You must do three things. Taxact 2012 return Keep a daily tip record. Taxact 2012 return Report tips to your employer. Taxact 2012 return Report all your tips on your income tax return. Taxact 2012 return  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. Taxact 2012 return This chapter will also show you how to treat allocated tips. Taxact 2012 return For information on special tip programs and agreements, see Publication 531. Taxact 2012 return Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. Taxact 2012 return   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Taxact 2012 return How to keep a daily tip record. Taxact 2012 return   There are two ways to keep a daily tip record. Taxact 2012 return You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Taxact 2012 return You should keep your daily tip record with your tax or other personal records. Taxact 2012 return You must keep your records for as long as they are important for administration of the federal tax law. Taxact 2012 return For information on how long to keep records, see How long to keep records in chapter 1. Taxact 2012 return    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Taxact 2012 return To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. Taxact 2012 return Also, Publication 1244 is available online at www. Taxact 2012 return irs. Taxact 2012 return gov/pub/irs-pdf/p1244. Taxact 2012 return pdf. Taxact 2012 return Publication 1244 includes a 1-year supply of Form 4070A. Taxact 2012 return Each day, write in the information asked for on the form. Taxact 2012 return   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Taxact 2012 return Although you do not report these tips to your employer, you must report them on your tax return. Taxact 2012 return   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Taxact 2012 return Then, each workday, write the date and the following information. Taxact 2012 return Cash tips you get directly from customers or from other employees. Taxact 2012 return Tips from credit and debit card charge customers that your employer pays you. Taxact 2012 return The value of any noncash tips you get, such as tickets, passes, or other items of value. Taxact 2012 return The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Taxact 2012 return Electronic tip record. Taxact 2012 return   You can use an electronic system provided by your employer to record your daily tips. Taxact 2012 return If you do, you must receive and keep a paper copy of this record. Taxact 2012 return Service charges. Taxact 2012 return    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Taxact 2012 return This is part of your wages, not a tip. Taxact 2012 return See examples below. Taxact 2012 return Example 1. Taxact 2012 return Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Taxact 2012 return Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Taxact 2012 return Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Taxact 2012 return Do not include the 18% charge in your tip diary. Taxact 2012 return Service charges that are paid to you are considered wages, not tips. Taxact 2012 return Example 2. Taxact 2012 return Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Taxact 2012 return David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. Taxact 2012 return Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Taxact 2012 return Be sure to include this amount in your tip diary. Taxact 2012 return Reporting Tips to Your Employer Why report tips to your employer. Taxact 2012 return   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Taxact 2012 return What tips to report. Taxact 2012 return   Report to your employer only cash, check, and debit and credit card tips you receive. Taxact 2012 return   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Taxact 2012 return   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Taxact 2012 return Do not report to your employer any portion of the tips you receive that you pass on to other employees. Taxact 2012 return However, you must report tips you receive from other employees. Taxact 2012 return    Do not report the value of any noncash tips, such as tickets or passes, to your employer. Taxact 2012 return You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. Taxact 2012 return How to report. Taxact 2012 return    If your employer does not give you any other way to report tips, you can use Form 4070. Taxact 2012 return Fill in the information asked for on the form, sign and date the form, and give it to your employer. Taxact 2012 return To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Taxact 2012 return   If you do not use Form 4070, give your employer a statement with the following information. Taxact 2012 return Your name, address, and social security number. Taxact 2012 return Your employer's name, address, and business name (if it is different from your employer's name). Taxact 2012 return The month (or the dates of any shorter period) in which you received tips. Taxact 2012 return The total tips required to be reported for that period. Taxact 2012 return You must sign and date the statement. Taxact 2012 return Be sure to keep a copy with your tax or other personal records. Taxact 2012 return   Your employer may require you to report your tips more than once a month. Taxact 2012 return However, the statement cannot cover a period of more than 1 calendar month. Taxact 2012 return Electronic tip statement. Taxact 2012 return   Your employer can have you furnish your tip statements electronically. Taxact 2012 return When to report. Taxact 2012 return   Give your report for each month to your employer by the 10th of the next month. Taxact 2012 return If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Taxact 2012 return Example. Taxact 2012 return You must report your tips received in September 2014 by October 10, 2014. Taxact 2012 return Final report. Taxact 2012 return   If your employment ends during the month, you can report your tips when your employment ends. Taxact 2012 return Penalty for not reporting tips. Taxact 2012 return   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. Taxact 2012 return (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Taxact 2012 return ) The penalty amount is in addition to the taxes you owe. Taxact 2012 return   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Taxact 2012 return To do so, attach a statement to your return explaining why you did not report them. Taxact 2012 return Giving your employer money for taxes. Taxact 2012 return   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Taxact 2012 return If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Taxact 2012 return   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. Taxact 2012 return All taxes on your regular pay. Taxact 2012 return Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. Taxact 2012 return Federal, state, and local income taxes on your reported tips. Taxact 2012 return    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Taxact 2012 return If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Taxact 2012 return See Publication 505, Tax Withholding and Estimated Tax, for more information. Taxact 2012 return    Uncollected taxes. Taxact 2012 return You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. Taxact 2012 return These uncollected taxes will be shown on your 2013 Form W-2. Taxact 2012 return See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Taxact 2012 return Reporting Tips on Your Tax Return How to report tips. Taxact 2012 return    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. Taxact 2012 return What tips to report. Taxact 2012 return   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Taxact 2012 return Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Taxact 2012 return Add to the amount in box 1 only the tips you did not report to your employer. Taxact 2012 return    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Taxact 2012 return    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Taxact 2012 return   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Taxact 2012 return Cash and charge tips you received that totaled less than $20 for any month. Taxact 2012 return The value of noncash tips, such as tickets, passes, or other items of value. Taxact 2012 return Example. Taxact 2012 return Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Taxact 2012 return Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Taxact 2012 return He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Taxact 2012 return Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. Taxact 2012 return He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Taxact 2012 return Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Taxact 2012 return    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Taxact 2012 return To report these taxes, you must file a return even if you would not otherwise have to file. Taxact 2012 return You must use Form 1040. Taxact 2012 return (You cannot file Form 1040EZ or Form 1040A. Taxact 2012 return )    Use Form 4137 to figure social security and Medicare taxes. Taxact 2012 return Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Taxact 2012 return Use Form 8959 to figure Additional Medicare Tax. Taxact 2012 return    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Taxact 2012 return To get railroad retirement credit, you must report tips to your employer. Taxact 2012 return Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. Taxact 2012 return   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Taxact 2012 return For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Taxact 2012 return   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Taxact 2012 return You must report these amounts as additional tax on your return. Taxact 2012 return Unlike the uncollected portion of the regular (1. Taxact 2012 return 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. Taxact 2012 return    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Taxact 2012 return You must report these taxes on Form 1040, line 60. Taxact 2012 return See the instructions for Form 1040, line 60. Taxact 2012 return (You cannot file Form 1040EZ or Form 1040A. Taxact 2012 return ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Taxact 2012 return They are not included in box 1 with your wages and reported tips. Taxact 2012 return If box 8 is blank, this discussion does not apply to you. Taxact 2012 return What are allocated tips. Taxact 2012 return   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Taxact 2012 return Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Taxact 2012 return No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. Taxact 2012 return How were your allocated tips figured. Taxact 2012 return   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Taxact 2012 return Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Taxact 2012 return For information about the exact allocation method used, ask your employer. Taxact 2012 return Must you report your allocated tips on your tax return. Taxact 2012 return   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Taxact 2012 return Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Taxact 2012 return Add to the amount in box 1 only the tips you did not report to your employer. Taxact 2012 return This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. Taxact 2012 return   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Taxact 2012 return How to report allocated tips. Taxact 2012 return   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Taxact 2012 return (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. Taxact 2012 return )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Taxact 2012 return Complete Form 4137, and include the allocated tips on line 1 of the form. Taxact 2012 return See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Taxact 2012 return Prev  Up  Next   Home   More Online Publications