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Taxact Index A Abandonments, Abandonments Annuities, Insurance Policies and Annuities Asset classification Capital, Capital Assets Noncapital, Noncapital Assets Assistance (see Tax help) Assumption of liabilities, Assumption of liabilities. Taxact , Liabilities. Taxact B Basis Adjusted, Adjusted basis. Taxact Original, Basis. Taxact Bonds, U. Taxact S. Taxact Treasury, U. Taxact S. Taxact Treasury Notes or Bonds Business, sold, Sale of a Business C Canceled Debt, Cancellation of debt. Taxact Lease, Cancellation of a lease. Taxact Real property sale, Canceling a sale of real property. Taxact Capital assets defined, Capital Assets Capital gains and losses Figuring, Long and Short Term Holding period, Holding period. Taxact Long term, Long and Short Term Short term, Long and Short Term Treatment of capital losses, Treatment of Capital Losses Casualties, Section 1231 transactions. Taxact Charitable organization Bargain sale to, Bargain sales to charity. Taxact , Bargain sale to charity. Taxact Gift to, Gift to charitable organization. Taxact Classes of assets, Classes of assets. Taxact Coal, Coal and Iron Ore Coins, Precious Metals and Stones, Stamps, and Coins Comments, Comments and suggestions. Taxact Commodities derivative financial instruments, Commodities derivative financial instrument. Taxact Condemnations, Condemnations, Section 1231 transactions. Taxact Conversion transactions, Conversion Transactions Copyrights, Copyright. Taxact , Copyrights. Taxact Covenant not to compete, Covenant not to compete. Taxact D Debt cancellation, Cancellation of debt. Taxact , Cancellation of debt. Taxact Deferred exchange, Deferred Exchange Depreciable property Real, Depreciable real property. Taxact Records, Depreciation Recapture Section 1245, Section 1245 property defined. Taxact , Like-Kind Exchanges and Involuntary Conversions Section 1250, Section 1250 property defined. Taxact Depreciation recapture Personal property, Section 1245 Property Real property, Section 1250 property defined. Taxact E Easement, Easement. Taxact Exchanges Deferred, Deferred Exchange Involuntary, Involuntary Conversions Like-kind, Like-Kind Exchanges, Like-Kind Exchanges and Involuntary Conversions Nontaxable, Nontaxable Exchanges Related persons, Related persons. Taxact U. Taxact S. Taxact Treasury notes or bonds, U. Taxact S. Taxact Treasury Notes or Bonds F Fair market value, Fair market value. Taxact Foreclosure, Foreclosures and Repossessions Form 1040 (Sch. Taxact D), Schedule D and Form 8949 1099-A, Forms 1099-A and 1099-C. Taxact , Forms 1099-A and 1099-C. Taxact 1099-B, Form 1099-B. Taxact 1099-C, Forms 1099-A and 1099-C. Taxact , Forms 1099-A and 1099-C. Taxact 1099-S, Form 1099-S. Taxact 4797, Business property. Taxact , Reporting the exchange. Taxact , Form 4797 8594, Reporting requirement. Taxact 8824, Reporting the exchange. Taxact 8949, Forms to file. Taxact , Personal-use property. Taxact , Reporting the exchange. Taxact , More information. Taxact , Timber, Introduction, Form 1099-B. Taxact , Personal-use property. Taxact , Mark-to-market election. Taxact Franchise, Franchise, Trademark, or Trade Name Free tax services, Free help with your tax return. Taxact G Gains and losses Bargain sale, Bargain Sale Business property, Ordinary or Capital Gain or Loss for Business Property Defined, Gain or Loss From Sales and Exchanges Form 4797, Form 4797 Ordinary or capital, Ordinary or Capital Gain or Loss Property changed to business or rental use, Property Changed to Business or Rental Use Property used partly for rental, Property Used Partly for Business or Rental Reporting, Reporting Gains and Losses Gifts of property, Gifts, Gift. Taxact Gold, Precious Metals and Stones, Stamps, and Coins H Hedging transactions, Hedging transaction. Taxact Help (see Tax help) Holding period, Holding period. Taxact Housing, low income, Low-income housing. Taxact , Low-Income Housing With Two or More Elements I Indirect ownership of stock, Ownership of stock or partnership interests. Taxact Information returns, Information Returns Inherited property, Inherited property. Taxact Installment sales, Installment Sales, Installment sale. Taxact Insurance policies, Insurance Policies and Annuities Intangible property, Dispositions of Intangible Property Involuntary conversion Defined, Involuntary Conversions Depreciable property, Like-Kind Exchanges and Involuntary Conversions Iron ore, Coal and Iron Ore L Land Release of restriction, Release of restriction on land. Taxact Subdivision, Subdivision of Land Lease, cancellation of, Cancellation of a lease. Taxact Liabilities, assumption, Liabilities. Taxact Like-kind exchanges Deferred, Deferred Exchange Liabilities, assumed, Assumption of liabilities. Taxact Like-class property, Like-Kind Property Like-kind property, Like-Kind Property Multiple parties, Multiple-party transactions. Taxact Multiple property, Multiple Property Exchanges Partnership interests, Partnership Interests Qualifying property, Qualifying Property Related persons, Like-Kind Exchanges Between Related Persons Low-income housing, Low-income housing. Taxact M Multiple property exchanges, Multiple Property Exchanges N Noncapital assets defined, Noncapital Assets Nontaxable exchanges Like-kind, Like-Kind Exchanges Other nontaxable exchanges, Other Nontaxable Exchanges Partially, Partially Nontaxable Exchanges Property exchanged for stock, Property Exchanged for Stock Notes, U. Taxact S. Taxact Treasury, U. Taxact S. Taxact Treasury Notes or Bonds O Ordinary or capital gain, Ordinary or Capital Gain or Loss P Partially nontaxable exchanges, Partially Nontaxable Exchanges Partnership Controlled, Controlled partnership transaction. Taxact Related persons, Related persons. Taxact , Controlled entity. Taxact Sale or exchange of interest, Partnership Interests, Partnership interests. Taxact , Partnership interests. Taxact Patents, Patents Personal property Depreciable, Like-Kind Exchanges and Involuntary Conversions Gains and losses, Personal-use property. Taxact Transfer at death, Transfers at Death Precious metals and stones, Precious Metals and Stones, Stamps, and Coins Property used partly for business or rental, Property Used Partly for Business or Rental, Part business or rental. Taxact Publications (see Tax help) Publicly traded securities, rollover of gain from, Rollover of Gain From Publicly Traded Securities R Real property Depreciable, Depreciable real property. Taxact Transfer at death, Transfers at Death Related persons, Sales and Exchanges Between Related Persons Condemned property replacement, bought from, Buying replacement property from a related person. Taxact Gain on sale of property, Sales and Exchanges Between Related Persons Like-kind exchanges between, Like-Kind Exchanges Between Related Persons List, Related persons. Taxact Loss on sale of property, Nondeductible Loss Patent transferred to, Related persons. Taxact Replacement property, Replacement property. Taxact , Replacement property to be produced. Taxact Repossession, Foreclosures and Repossessions, Repossession. Taxact Residual method, sale of business, Residual method. Taxact Rollover of gain, Rollover of Gain From Publicly Traded Securities S Sale of a business, Sale of a Business Sales Bargain, charitable organization, Bargain sales to charity. Taxact , Bargain sale to charity. Taxact Installment, Installment Sales, Installment sale. Taxact Property changed to business or rental use, Property Changed to Business or Rental Use Related persons, Sales and Exchanges Between Related Persons, Related persons. Taxact Section 1231 gains and losses, Section 1231 Gains and Losses Section 1245 property Defined, Section 1245 Property Gain, ordinary income, Gain Treated as Ordinary Income Multiple asset accounts, Multiple asset accounts. Taxact Section 1250 property Additional depreciation, Additional Depreciation Defined, Section 1250 property defined. Taxact Foreclosure, Foreclosure. Taxact Gain, ordinary income, Gain Treated as Ordinary Income Nonresidential, Nonresidential real property. Taxact Residential, Residential rental property. Taxact Section 197 intangibles, Section 197 Intangibles Severance damages, Severance damages. Taxact Silver, Precious Metals and Stones, Stamps, and Coins Small business stock, Gains on Sales of Qualified Small Business Stock Specialized small business investment company (SSBIC), rollover of gain into, Rollover of Gain From Publicly Traded Securities Stamps, Precious Metals and Stones, Stamps, and Coins Stock Capital asset, Capital Assets Controlling interest, corporation, Controlling interest in a corporation. Taxact Indirect ownership, Ownership of stock or partnership interests. Taxact Property exchanged for, Property Exchanged for Stock Publicly traded securities, Rollover of Gain From Publicly Traded Securities Small business, Gains on Sales of Qualified Small Business Stock Suggestions, Comments and suggestions. Taxact T Tax help, How To Get Tax Help Tax rates, capital gain, Capital Gains Tax Rates Thefts, Section 1231 transactions. Taxact Timber, Timber, Section 1231 transactions. Taxact Trade name, Franchise, Trademark, or Trade Name Trademark, Franchise, Trademark, or Trade Name Transfers to spouse, Transfers to Spouse U U. Taxact S. Taxact Treasury bonds, U. Taxact S. Taxact Treasury Notes or Bonds Unharvested crops, Section 1231 transactions. Taxact Prev  Up     Home   More Online Publications
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Taxact 4. Taxact   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Taxact  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Taxact For more information, see Publication 505. Taxact Reminders Estimated tax safe harbor for higher income taxpayers. Taxact  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Taxact Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Taxact In general, the federal income tax is a pay-as-you-go tax. Taxact There are two ways to pay as you go. Taxact Withholding. Taxact If you are an employee, your employer probably withholds income tax from your pay. Taxact Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Taxact The amount withheld is paid to the IRS in your name. Taxact Estimated tax. Taxact If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Taxact People who are in business for themselves generally will have to pay their tax this way. Taxact Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Taxact Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Taxact This chapter explains these methods. Taxact In addition, it also explains the following. Taxact Credit for withholding and estimated tax. Taxact When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Taxact , and for the estimated tax you paid for 2013. Taxact Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Taxact Underpayment penalty. Taxact If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Taxact In most cases, the IRS can figure this penalty for you. Taxact See Underpayment Penalty for 2013 at the end of this chapter. Taxact Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Taxact This section explains the rules for withholding tax from each of these types of income. Taxact This section also covers backup withholding on interest, dividends, and other payments. Taxact Salaries and Wages Income tax is withheld from the pay of most employees. Taxact Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Taxact It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Taxact See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Taxact If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Taxact This is explained under Exemption From Withholding , later. Taxact You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Taxact If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Taxact Military retirees. Taxact   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Taxact Household workers. Taxact   If you are a household worker, you can ask your employer to withhold income tax from your pay. Taxact A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Taxact   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Taxact If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Taxact Farmworkers. Taxact   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Taxact Differential wage payments. Taxact    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Taxact Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Taxact The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Taxact   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Taxact Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Taxact The amount you earn in each payroll period. Taxact The information you give your employer on Form W-4. Taxact Form W-4 includes four types of information that your employer will use to figure your withholding. Taxact Whether to withhold at the single rate or at the lower married rate. Taxact How many withholding allowances you claim (each allowance reduces the amount withheld). Taxact Whether you want an additional amount withheld. Taxact Whether you are claiming an exemption from withholding in 2014. Taxact See Exemption From Withholding , later. Taxact Note. Taxact You must specify a filing status and a number of withholding allowances on Form W-4. Taxact You cannot specify only a dollar amount of withholding. Taxact New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Taxact Your employer should have copies of the form. Taxact If you need to change the information later, you must fill out a new form. Taxact If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Taxact You may be able to avoid overwithholding if your employer agrees to use the part-year method. Taxact See Part-Year Method in chapter 1 of Publication 505 for more information. Taxact Employee also receiving pension income. Taxact   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Taxact However, you can choose to split your withholding allowances between your pension and job in any manner. Taxact Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Taxact When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Taxact If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Taxact Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Taxact Changing your withholding for 2015. Taxact   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Taxact If the event occurs in December 2014, submit a new Form W-4 within 10 days. Taxact Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Taxact If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Taxact You should try to have your withholding match your actual tax liability. Taxact If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Taxact If too much tax is withheld, you will lose the use of that money until you get your refund. Taxact Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Taxact Note. Taxact You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Taxact Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Taxact The worksheets are for your own records. Taxact Do not give them to your employer. Taxact Multiple jobs. Taxact   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Taxact Then split your allowances between the Forms W-4 for each job. Taxact You cannot claim the same allowances with more than one employer at the same time. Taxact You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Taxact Married individuals. Taxact   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Taxact Use only one set of worksheets. Taxact You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Taxact   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Taxact Alternative method of figuring withholding allowances. Taxact   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Taxact For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Taxact Personal Allowances Worksheet. Taxact   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Taxact Deduction and Adjustments Worksheet. Taxact   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Taxact Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Taxact Two-Earners/Multiple Jobs Worksheet. Taxact   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Taxact Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Taxact Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Taxact You accurately complete all the Form W-4 worksheets that apply to you. Taxact You give your employer a new Form W-4 when changes occur. Taxact But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Taxact This is most likely to happen in the following situations. Taxact You are married and both you and your spouse work. Taxact You have more than one job at a time. Taxact You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Taxact You will owe additional amounts with your return, such as self-employment tax. Taxact Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Taxact Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Taxact You work only part of the year. Taxact You change the number of your withholding allowances during the year. Taxact Cumulative wage method. Taxact   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Taxact You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Taxact You must ask your employer in writing to use this method. Taxact   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Taxact ) since the beginning of the year. Taxact Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Taxact It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Taxact It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Taxact If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Taxact You can use the IRS Withholding Calculator at www. Taxact irs. Taxact gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Taxact Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Taxact These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Taxact New Form W-4. Taxact   When you start a new job, your employer should have you complete a Form W-4. Taxact Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Taxact   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Taxact The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Taxact No Form W-4. Taxact   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Taxact Repaying withheld tax. Taxact   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Taxact Your employer cannot repay any of the tax previously withheld. Taxact Instead, claim the full amount withheld when you file your tax return. Taxact   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Taxact Your employer can repay the amount that was withheld incorrectly. Taxact If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Taxact Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Taxact The exemption applies only to income tax, not to social security or Medicare tax. Taxact You can claim exemption from withholding for 2014 only if both of the following situations apply. Taxact For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Taxact For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Taxact Students. Taxact   If you are a student, you are not automatically exempt. Taxact See chapter 1 to find out if you must file a return. Taxact If you work only part time or only during the summer, you may qualify for exemption from withholding. Taxact Age 65 or older or blind. Taxact   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Taxact Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Taxact Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Taxact Claiming exemption from withholding. Taxact   To claim exemption, you must give your employer a Form W-4. Taxact Do not complete lines 5 and 6. Taxact Enter “Exempt” on line 7. Taxact   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Taxact If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Taxact   Your claim of exempt status may be reviewed by the IRS. Taxact An exemption is good for only 1 year. Taxact   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Taxact Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Taxact The payer can figure withholding on supplemental wages using the same method used for your regular wages. Taxact However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Taxact Expense allowances. Taxact   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Taxact   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Taxact   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Taxact Penalties You may have to pay a penalty of $500 if both of the following apply. Taxact You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Taxact You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Taxact There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Taxact The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Taxact These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Taxact A simple error or an honest mistake will not result in one of these penalties. Taxact For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Taxact Tips The tips you receive while working on your job are considered part of your pay. Taxact You must include your tips on your tax return on the same line as your regular pay. Taxact However, tax is not withheld directly from tip income, as it is from your regular pay. Taxact Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Taxact See chapter 6 for information on reporting your tips to your employer. Taxact For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Taxact How employer figures amount to withhold. Taxact   The tips you report to your employer are counted as part of your income for the month you report them. Taxact Your employer can figure your withholding in either of two ways. Taxact By withholding at the regular rate on the sum of your pay plus your reported tips. Taxact By withholding at the regular rate on your pay plus a percentage of your reported tips. Taxact Not enough pay to cover taxes. Taxact   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Taxact See Giving your employer money for taxes in chapter 6. Taxact Allocated tips. Taxact   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Taxact Withholding is based only on your pay plus your reported tips. Taxact Your employer should refund to you any incorrectly withheld tax. Taxact See Allocated Tips in chapter 6 for more information. Taxact Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Taxact Your employer generally must withhold income tax on these benefits from your regular pay. Taxact For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Taxact Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Taxact Your employer must notify you if this choice is made. Taxact For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Taxact Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Taxact To qualify as sick pay, it must be paid under a plan to which your employer is a party. Taxact If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Taxact An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Taxact However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Taxact See Form W-4S , later. Taxact If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Taxact Union agreements. Taxact   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Taxact See your union representative or your employer for more information. Taxact Form W-4S. Taxact   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Taxact Its instructions contain a worksheet you can use to figure the amount you want withheld. Taxact They also explain restrictions that may apply. Taxact   Give the completed form to the payer of your sick pay. Taxact The payer must withhold according to your directions on the form. Taxact Estimated tax. Taxact   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Taxact If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Taxact See Underpayment Penalty for 2013 at the end of this chapter. Taxact Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Taxact This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Taxact The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Taxact Income tax withholding from an ERD is mandatory. Taxact More information. Taxact   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Taxact For information on IRAs, see chapter 17. Taxact For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Taxact Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Taxact Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Taxact Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Taxact Any other wager, if the proceeds are at least 300 times the amount of the bet. Taxact It does not matter whether your winnings are paid in cash, in property, or as an annuity. Taxact Winnings not paid in cash are taken into account at their fair market value. Taxact Exception. Taxact   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Taxact However, you may need to provide the payer with a social security number to avoid withholding. Taxact See Backup withholding on gambling winnings in chapter 1 of Publication 505. Taxact If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Taxact See Estimated Tax for 2014 , later. Taxact If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Taxact See Underpayment Penalty for 2013 at the end of this chapter. Taxact Form W-2G. Taxact   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Taxact Report the tax withheld on line 62 of Form 1040. Taxact Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Taxact To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Taxact All unemployment compensation is taxable. Taxact So, if you do not have income tax withheld, you may have to pay estimated tax. Taxact See Estimated Tax for 2014 , later. Taxact If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Taxact For information, see Underpayment Penalty for 2013 at the end of this chapter. Taxact Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Taxact These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Taxact S. Taxact C. Taxact 1421 et. Taxact seq. Taxact ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Taxact To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Taxact If you do not choose to have income tax withheld, you may have to pay estimated tax. Taxact See Estimated Tax for 2014 , later. Taxact If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Taxact For information, see Underpayment Penalty for 2013 at the end of this chapter. Taxact More information. Taxact   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Taxact Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Taxact Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Taxact The information return shows how much you were paid during the year. Taxact It also includes your name and taxpayer identification number (TIN). Taxact TINs are explained in chapter 1 under Social Security Number (SSN) . Taxact These payments generally are not subject to withholding. Taxact However, “backup” withholding is required in certain situations. Taxact Backup withholding can apply to most kinds of payments that are reported on Form 1099. Taxact The payer must withhold at a flat 28% rate in the following situations. Taxact You do not give the payer your TIN in the required manner. Taxact The IRS notifies the payer that the TIN you gave is incorrect. Taxact You are required, but fail, to certify that you are not subject to backup withholding. Taxact The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Taxact The IRS will do this only after it has mailed you four notices over at least a 210-day period. Taxact See Backup Withholding in chapter 1 of Publication 505 for more information. Taxact Penalties. Taxact   There are civil and criminal penalties for giving false information to avoid backup withholding. Taxact The civil penalty is $500. Taxact The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Taxact Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Taxact This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Taxact You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Taxact Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Taxact If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Taxact If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Taxact For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Taxact Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Taxact To do this, give a new Form W-4 to your employer. Taxact See chapter 1 of Publication 505. Taxact Estimated tax not required. Taxact   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Taxact You had no tax liability for 2013. Taxact You were a U. Taxact S. Taxact citizen or resident alien for the whole year. Taxact Your 2013 tax year covered a 12-month period. Taxact   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Taxact For the definition of “total tax” for 2013, see Publication 505, chapter 2. Taxact Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Taxact You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Taxact General rule. Taxact   In most cases, you must pay estimated tax for 2014 if both of the following apply. Taxact You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Taxact You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Taxact Your 2013 tax return must cover all 12 months. Taxact    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Taxact Special rules for farmers, fishermen, and higher income taxpayers. Taxact   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Taxact If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Taxact See Figure 4-A and Publication 505, chapter 2 for more information. Taxact Figure 4-A. Taxact Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Taxact Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Taxact   Resident and nonresident aliens also may have to pay estimated tax. Taxact Resident aliens should follow the rules in this chapter unless noted otherwise. Taxact Nonresident aliens should get Form 1040-ES (NR), U. Taxact S. Taxact Estimated Tax for Nonresident Alien Individuals. Taxact   You are an alien if you are not a citizen or national of the United States. Taxact You are a resident alien if you either have a green card or meet the substantial presence test. Taxact For more information about the substantial presence test, see Publication 519, U. Taxact S. Taxact Tax Guide for Aliens. Taxact Married taxpayers. Taxact   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Taxact   You and your spouse can make joint estimated tax payments even if you are not living together. Taxact   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Taxact   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Taxact Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Taxact 2013 separate returns and 2014 joint return. Taxact   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Taxact You filed a separate return if you filed as single, head of household, or married filing separately. Taxact 2013 joint return and 2014 separate returns. Taxact   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Taxact You file a separate return if you file as single, head of household, or married filing separately. Taxact   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Taxact Then multiply the tax on the joint return by the following fraction. Taxact     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Taxact Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Taxact Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Taxact For 2014, they plan to file married filing separately. Taxact Joe figures his share of the tax on the 2013 joint return as follows. Taxact   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Taxact 6%     Joe's share of tax on joint return  ($6,386 × 87. Taxact 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Taxact When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Taxact Use your 2013 federal tax return as a guide. Taxact You can use Form 1040-ES and Publication 505 to figure your estimated tax. Taxact Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Taxact You must make adjustments both for changes in your own situation and for recent changes in the tax law. Taxact For a discussion of these changes, visit IRS. Taxact gov. Taxact For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Taxact When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Taxact Each period has a specific payment due date. Taxact If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Taxact The payment periods and due dates for estimated tax payments are shown next. Taxact   For the period: Due date:*     Jan. Taxact 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Taxact 15     Sept. Taxact 1– Dec. Taxact 31 Jan. Taxact 15, next year     *See Saturday, Sunday, holiday rule and January payment . Taxact Saturday, Sunday, holiday rule. Taxact   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Taxact January payment. Taxact   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Taxact Fiscal year taxpayers. Taxact   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Taxact When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Taxact If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Taxact You can pay all your estimated tax at that time, or you can pay it in installments. Taxact If you choose to pay in installments, make your first payment by the due date for the first payment period. Taxact Make your remaining installment payments by the due dates for the later periods. Taxact No income subject to estimated tax during first period. Taxact    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Taxact You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Taxact The following chart shows when to make installment payments. Taxact If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Taxact 15 Jan. Taxact 15 next year April 1–May 31 June 16 Sept. Taxact 15 Jan. Taxact 15 next year June 1–Aug. Taxact 31 Sept. Taxact 15 Jan. Taxact 15 next year After Aug. Taxact 31 Jan. Taxact 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Taxact How much to pay to avoid a penalty. Taxact   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Taxact How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Taxact You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Taxact These methods are described in chapter 2 of Publication 505. Taxact If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Taxact If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Taxact Underpayment penalty. Taxact   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Taxact Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Taxact See chapter 4 of Publication 505 for more information. Taxact Change in estimated tax. Taxact   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Taxact Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Taxact Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Taxact You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Taxact How To Pay Estimated Tax There are several ways to pay estimated tax. Taxact Credit an overpayment on your 2013 return to your 2014 estimated tax. Taxact Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Taxact Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Taxact Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Taxact On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Taxact Take the amount you have credited into account when figuring your estimated tax payments. Taxact You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Taxact You also cannot use that overpayment in any other way. Taxact Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Taxact You can pay using either of the following electronic payment methods. Taxact Direct transfer from your bank account. Taxact Credit or debit card. Taxact To pay your taxes online or for more information, go to www. Taxact irs. Taxact gov/e-pay. Taxact Pay by Phone Paying by phone is another safe and secure method of paying electronically. Taxact Use one of the following methods. Taxact Direct transfer from your bank account. Taxact Credit or debit card. Taxact To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Taxact People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Taxact To pay using a credit or debit card, you can call one of the following service providers. Taxact There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Taxact WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Taxact payUSAtax. Taxact com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Taxact officialpayments. Taxact com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Taxact PAY1040. Taxact com For the latest details on how to pay by phone, go to www. Taxact irs. Taxact gov/e-pay. Taxact Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Taxact During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Taxact The enclosed payment vouchers will be preprinted with your name, address, and social security number. Taxact Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Taxact Use the window envelopes that came with your Form 1040-ES package. Taxact If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Taxact Note. Taxact These criteria can change without notice. Taxact If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Taxact irs. Taxact gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Taxact Complete one of these and make your payment timely to avoid penalties for paying late. Taxact Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Taxact If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Taxact gov. Taxact Follow the instructions to make sure you use the vouchers correctly. Taxact Joint estimated tax payments. Taxact   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Taxact Change of address. Taxact   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Taxact Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Taxact Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Taxact Also take credit for the estimated tax you paid for 2013. Taxact These credits are subtracted from your total tax. Taxact Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Taxact Two or more employers. Taxact   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Taxact You may be able to claim the excess as a credit against your income tax when you file your return. Taxact See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Taxact Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Taxact Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Taxact Forms W-2 and W-2G. Taxact   If you file a paper return, always file Form W-2 with your income tax return. Taxact File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Taxact   You should get at least two copies of each form. Taxact If you file a paper return, attach one copy to the front of your federal income tax return. Taxact Keep one copy for your records. Taxact You also should receive copies to file with your state and local returns. Taxact Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Taxact You should receive a separate Form W-2 from each employer you worked for. Taxact If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Taxact However, your employer must provide or send it to you by January 31, 2014. Taxact If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Taxact If you have not received your Form W-2 by January 31, you should ask your employer for it. Taxact If you do not receive it by February 15, call the IRS. Taxact Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Taxact Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Taxact In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Taxact Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Taxact If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Taxact Report the amounts you won on line 21 of Form 1040. Taxact Take credit for the tax withheld on line 62 of Form 1040. Taxact If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Taxact The 1099 Series Most forms in the 1099 series are not filed with your return. Taxact These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Taxact Unless instructed to file any of these forms with your return, keep them for your records. Taxact There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Taxact ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Taxact If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Taxact See the instructions to these forms for details. Taxact Form 1099-R. Taxact   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Taxact Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Taxact You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Taxact Backup withholding. Taxact   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Taxact Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Taxact Call the telephone number or write to the address given for the payer on the form. Taxact The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Taxact A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Taxact In certain situations, you will receive two forms in place of the original incorrect form. Taxact This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Taxact One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Taxact This form will have an “X” in the “CORRECTED” box at the top of the form. Taxact The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Taxact Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Taxact S. Taxact Individual Income Tax Return. Taxact Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Taxact Do not include any amount withheld from your spouse's income. Taxact However, different rules may apply if you live in a community property state. Taxact Community property states are listed in chapter 2. Taxact For more information on these rules, and some exceptions, see Publication 555, Community Property. Taxact Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Taxact For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Taxact Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Taxact Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Taxact You must use Form 1040 or Form 1040A if you paid estimated tax. Taxact You cannot use Form 1040EZ. Taxact Name changed. Taxact   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Taxact The statement should cover payments you made jointly with your spouse as well as any you made separately. Taxact   Be sure to report the change to the Social Security Administration. Taxact This prevents delays in processing your return and issuing any refunds. Taxact Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Taxact If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Taxact One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Taxact If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Taxact Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Taxact If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Taxact If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Taxact If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Taxact Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Taxact Generally, you will not have to pay a penalty for 2013 if any of the following apply. Taxact The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Taxact The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Taxact Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Taxact You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Taxact See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Taxact Farmers and fishermen. Taxact   Special rules apply if you are a farmer or fisherman. Taxact See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Taxact IRS can figure the penalty for you. Taxact   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Taxact Generally, the IRS will figure the penalty for you and send you a bill. Taxact However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Taxact See chapter 4 of Publication 505. Taxact Prev  Up  Next   Home   More Online Publications