Latest news with #WageandTaxStatement
Yahoo
06-03-2025
- Business
- Yahoo
Ghost preparers and spear phishing: Here's the tax scams to avoid
SAN DIEGO (FOX 5/KUSI) — 'Your account has now been put on hold.' Anyone who has a phone or email address may have seen a similar message before, especially as tax season approaches. The sender might also attempt to threaten someone with false legal or criminal charges for tax fraud. While receiving such a text or email from an unrecognizable sender may cause alarm, the Internal Revenue Service says not to react immediately. California landlords prohibited from charging these fees starting in April Email and text scams are common examples of fraudsters trying to lure victims into providing them with personal and financial information, according to the IRS. These tactics are often called email phishing or smishing. With the tax filing deadline coming up on April 15, the IRS released its annual 'Dirty Dozen' list of tax scams for 2025 to warn people of common schemes — including phishing and smishing — that are meant to steal their money and identity. Here are just some of the other scams taxpayers should watch out for, according to the IRS: Taxpayers should not trust information circulating on social media, including on TikTok where some share inaccurate tax advice, the IRS stated. It added that following bad advice may lead to identity theft and tax problems. Whenever a natural disaster or crisis happens, scammers tend to set up fake organizations in an effort to profit off the public's generosity, according to the IRS. Taxpayers should avoid giving money or goods to charities that are not qualified tax-exempt organizations recognized by the IRS. Last year, the IRS said some taxpayers were misled into thinking they qualified for the Fuel Tax Credit. However, it is only for off-highway business and farming use, according to the bureau. Similarly, taxpayers cannot claim credits for Sick or Family Leave unless they were self-employed during 2020 and 2021 during the pandemic. In the past, the IRS said taxpayers who did not qualify attempted to claim the credit based on income earned an an employee and not as a self-employed individual. Scammers sometimes instruct people to fill out forms such as a W-2, Wage and Tax Statement or 1099-NEC with false large incomes and withholding amounts with the hopes they could get a substantial tax refund. However, if the IRS cannot verify the wages, income or withholding amount entered on the tax return, the refund will be held pending further review, the bureau stated. Fraudsters may promote the Offers in Compromise program to people who do not meet the qualifications, which could cost taxpayers thousands of dollars, the IRS said. Taxpayers can check if they are eligible for the program using the IRS's Offer in Compromise Pre-Qualifier tool. Fake tax professionals might charge people a fee based on the size of the refund or are unwilling to sign the return. Real tax preparers are required by law to include their Preparer Tax Identification Number (PTIN). Tips on how to find a legitimate tax preparer can be found on the IRS website. The last common scam the IRS included on its list targets tax professionals rather than their clients. Potential clients try to trick preparers and other businesses into responding to their emails. Then, they send a malicious attachment or URL which may allow them to access their clients' personal information. The IRS warns tax professionals to look out for poorly constructed sentences and suspicious requests before responding to an email. The full list of the IRS' 'Dirty Dozen' tax scams for 2025 can be found on Taxpayers and preparers can report abusive practices to the IRS Whistleblower Office for a possible monetary award. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
12-02-2025
- Business
- Yahoo
How does having multiple jobs affect your tax return?
(NewsNation) — Side hustles have become a necessity for many Americans, and there are several ways a second job can impact your taxes. More than 8.6 million people in the U.S. held multiple jobs in January, roughly 5.3% of the workforce, according to the Bureau of Labor Statistics. Whether you moonlight as an Uber driver or tutor on the side, the IRS requires you to report and pay taxes on that income. Here's what to know about filing your federal tax return if you work multiple jobs, Side hustles becoming a necessity for some Americans No, you do not file multiple federal tax returns for each job separately. The IRS only requires one tax return per person, but you do have to include any income you earn, whether it's from a primary job or a side gig. Let's say you're a school teacher but occasionally drive for Uber on the weekends: You'll need to pay taxes on both sources of income. But even though there are two income streams, you can report them on a single federal return. Your tax bill is based on the total amount of money you earned, not the number of jobs you have. How long does it take to get your tax refund? While you'll only file one federal tax return, the way you report that income varies depending on the type of jobs you have. There are a few tax forms you may need: Form W-2: Also known as a 'Wage and Tax Statement.' This shows how much an employee made and how much tax the employer withheld. The form is sent to you by your employer in January, and the IRS also receives a copy. Form 1099-K: This will show payments you received from third parties or marketplaces, which includes money you earned through ridesharing apps like Uber or Lyft. New this year: Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 will receive a Form 1099-K. Keep in mind: You still have to report any income on your tax return, even if you don't receive a Form 1099-K. Form 1099-NEC: This is for pay from independent contractor jobs, sometimes known as self-employment income or freelance work. Since taxes aren't deducted from their pay, most freelancers are expected to make quarterly tax payments four times a year known as estimated taxes. Find out if that applies to you here. When it's time to file your taxes, you will use the various forms to determine the taxable income you have to report. 7 key tax terms you should know Employers withhold a portion of each worker's paycheck for federal income taxes throughout the year. That amount is determined by how much money you make and the information you provide on your W-4 form. The W-4 form requires you to provide information about your expected filing status, family income from other jobs and number of dependents to make sure the right amount of tax is being withheld from your paycheck. If you have the correct amount of income tax withheld, then you shouldn't owe taxes or get a big refund when you file your return. However, withholding can be confusing when you have multiple jobs because a side gig can change your tax liability. If your W-4 form is outdated and doesn't reflect your side income, then you could be left with an unexpected tax bill at the end of the year. As an employee, you can submit a revised W-4 at any point during the year, so make sure it's up to date if you have a side gig. In general, the IRS says you should increase your withholding if: You hold more than one job at a time, or you and your spouse both have jobs You have income from sources other than jobs or self-employment that is not subject to withholding 'If you do not make adjustments to your withholding for these situations, you will very likely owe additional tax when filing your tax return, and you may owe penalties,' according to the IRS. You can use the IRS Tax Withholding Estimator to figure out how to complete your W-4. There are a few things to keep in mind that could lower your federal tax liability if you work multiple jobs. Track your expenses: Side hustles or self-employment often means more possible deductions. That's why it's important to keep track of all your expenses and receipts. When you go to file, you may reduce your tax liability by itemizing your deductions, but you may be asked to back it up with proof. Be careful of Social Security taxes: The maximum earnings subject to Social Security tax is $168,600 in 2024. Any earnings above that threshold aren't subject to Social Security tax, so if you have a side hustle, make sure your employer is aware and not withholding too much. Pay attention to your tax bracket: Having multiple jobs could push you into a different tax bracket. But remember: When your income jumps to a higher tax bracket, you don't pay the higher rate on your entire income. Instead, you are taxed only on the part that is in the higher bracket. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
07-02-2025
- Business
- Yahoo
What is a W-2 form? A starting point for filing your taxes.
If you've ever been an employer or an employee in America, chances are you've filled out, or at least seen, a W-2 form. That's because this form is used by the Internal Revenue Service (IRS) to help estimate tax withholding. If you earned taxable wages or compensation over $600, you should receive a W-2. Employers are required to send them, either through the mail or electronically, by Jan. 31 of the year taxes are due. The IRS refers to Form W-2 as the Wage and Tax Statement. This document summarizes your income for the tax year and tracks the income, Social Security, and Medicare taxes that were withheld. Because a W-2 records the amount of taxes you've already paid, it's an important document to have for completing your federal tax return In addition to reporting how much your employer withheld in payroll taxes, sometimes referred to as FICA taxes, your W-2 provides tax reporting about other compensation such as employer-provided health insurance, retirement and health savings account contributions, dependent care benefits, and more. Your employer must send you and the IRS a W-2 form for tax purposes. Employers who have 10 or more Form W-2s are required to e-file information returns with the IRS. You may hear some confusing jargon about Copy A, B, and C of the W-2 form, but this just refers to duplicates of the same form. Copy A is for your employer to submit to the IRS, Copy B is for you to file with your tax return, and Copy C is tax information for your records. A Copy 2 of your W-2 form may also be included and reflects any state, city, or local income tax withheld. Employers are also responsible for filing a Form W-3 for each of their W-2 employees with the Social Security Administration (SSA) to determine Social Security tax and earned benefits. Although your employer files a W-2 associated with your Social Security number with the IRS, you are also responsible for including a copy with your individual tax return. Read more: How to determine your tax withholding to avoid surprises Staring down a W-2 form and not really sure what you're looking at? With 20 different fields of information, there's plenty to overwhelm the average taxpayer. Here's what you'll find in each box of the current Form W-2 Wage and Tax Statement. On the top of a W-2 form is the employee name, address, and Social Security number. This is listed alongside the employer address and the employer's identification number or the employer's state ID number if applicable. There's also a box for a control number, which refers to a number your employer may have assigned you in their system. Box 1 shows your taxable income, including total wages and other compensation. Box 2 shows your federal income tax withholding for the year. These boxes are all about Social Security, including how much of your income is taxable for Social Security purposes and the amount of Social Security tax withheld. These boxes on the W-2 shows how much of your wages are subject to Medicare tax and the amount of Medicare tax you had withheld. These two boxes are for the extras you might have earned, such as tips, that are subject to Social Security taxes in box 7 and allocated tips in Box 8. The IRS defines allocated tips as 'amounts your employer assigned to you in addition to the tips you reported.' If you don't see anything in Box 9, don't worry. It was a field for a tax credit that no longer exists. Box 10 reports how much you received from your employer in dependent care benefits. Box 11 has some confusing language about nonqualified plans, but this just refers to deferred compensation typically offered to executives. Box 12 shows other types of compensation, such as 401(k) or health savings account contributions. This line is a catchall for information that doesn't fit elsewhere. Box 13 has three smaller boxes for reporting withholdings from an employer-sponsored retirement plan or sick pay. Box 14 is for all the leftovers like state disability insurance, union dues, and health insurance premiums. At the bottom of your W-2 form, there may be additional boxes that reflect state tax information, such as any state income tax or local income tax withholdings. If your state or local government doesn't offer or require automatic withholding, these boxes may be left blank. Read more: Free tax filing: How to file your 2024 return for free If there's a mistake on your W-2, such as an incorrect amount or a misspelled name, point out the error to your employer and ask for a corrected form. It may take time and be a hassle, but if it involves a significant amount or big mistake, the IRS could issue a fine to your employer. It's worth waiting for the corrected form for your own peace of mind as well. If the taxable income on your federal or state return doesn't match what's on your Form W-2, it could trigger an IRS audit. The IRS has instructions for filling out a supplemental form in case you don't get your corrected W-2 before the tax filing deadline. If your W-2 withholdings were more than your tax liability for the year, the IRS will issue you a refund. But if you don't want to wait until tax season to get your own money back next time, work with your employer to correct and adjust your withholdings. Your employer is required to mail your W-2 by Jan. 31, but that doesn't mean you'll receive it by then. Wait until mid-February before you follow up, and check if you have access to a copy online or through your HR department. If you don't have your W-2 form by the end of February and your employer has been unresponsive, you can contact the IRS at 800-829-1040. They'll follow up with your employer and send you a substitute form to fill out so you can complete your taxes. W-2 and W-4 forms are easy to confuse, but a W-2 is a form your employer fills out that reports how much you've made and the amount withheld for federal and state tax purposes. A Form W-4 is one you fill out that tells your employer how much tax to withhold. A W-4, also referred to by the IRS as an Employee's Withholding Certificate, tells the company or small business you work for how much you'd like to have withheld for taxes, depending on your marital status, how many kids you have, and other information. All employees with taxable wages or compensation over $600 should receive a W-2. Some employees may even receive several W-2s if they worked more than one job during the calendar year. The exception to this rule is self-employed taxpayers, such as independent contractors, gig workers, or freelancers. Unless they're defined as statutory employees, these workers receive a Form 1099 instead of a W-2 form. Because they don't have federal income tax withheld, these taxpayers can use the 1099 to calculate their taxable income and estimate any remaining tax obligations. Read more: How do self-employment taxes work? A step-by-step guide While it's your employer's responsibility to file a W-2 (and a W-3) with the IRS and Social Security Administration, you'll also need to file one with your federal and state tax return. The exception is if you made less than $600, in which case the IRS will not require a W-2, but still encourages taxpayers to report the income. Independent contractors and freelancers file Form 1099 instead of Form W-2, which details their taxable income and other compensation for the tax year.
