Important Reminders

The following reminders and other items may help you file your tax return.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843- 5678) if you recognize a child.

Principal agricultural activity codes. You must enter on line B of Schedule F (Form 1040) a code that identifies your principal agricultural activity. It is important to use the correct code, since this information will identify market segments of the public for IRS Taxpayer Education programs. The U.S. Census Bureau also uses this information for its economic census. See the list of Principal Agricultural Activity Codes on page 2 of Schedule F.

Business use of your home. You may be able to deduct expenses for your home office even if it is not where you perform your most important business activities or spend most of your business time. See chapter 5.

Estimated tax. When you figure your estimated tax, you must include any alternative minimum tax you expect to owe. See chapter 14 and Publication 505.

Averaging of farm income. You, as an individual farmer, can choose to average all or part of your taxable farm income when you figure your income tax. If you average your income, you may be able to use a negative taxable income amount for a base year when figuring your tax on Schedule J (Form 1040). See chapter 4.

Voluntary withholding. You can request income tax withholding from the following payments on Form W-4V, Voluntary Withholding Request.

1. Commodity Credit Corporation (CCC) loans.
2. Certain crop disaster payments received under the Agricultural Act of 1949 or title II of the Disaster Assistance Act of 1988.
3. Social security benefits.
4. Unemployment compensation.
5. Certain other government payments.

See chapter 4 for information on CCC loans and disaster relief payments.

Direct deposit of refund. If you are due a refund on your tax return, you can have it deposited directly into your account at a bank or other financial institution. See your income tax package for details.

Change of address. If you change your home or business address, you should use Form 8822, Change of Address, to notify the IRS. Be sure to include your suite, room, or other unit number.

Written tax questions. You can send written tax questions to the IRS. You should get an answer in about 30 days. Call 1-800-829- 1040 if you need the address. Do not send questions with your return.

IRS e-file (electronic filing). You can file your tax returns electronically using an IRS e-file option. The benefits of IRS e-file include faster refunds, increased accuracy, and acknowledgment of IRS receipt of your return. You can use one of the following IRS e-file options.

1. Use an authorized IRS e-file provider.
2. Use a personal computer.
3. Use a telephone if you receive a Telefile Tax Package.
4. Visit a VITA or TCE site.
5. Use an employer or financial institution.

For details on these fast filing methods, see your income tax package.

Electronic deposits of taxes. You must use the Electronic Federal Tax Payment System (EFTPS) to make electronic deposits of all depository tax liabilities you incur in 2002 and thereafter if you deposited more than $200,000 in federal depository taxes in 2000 or you had to use EFTPS in 2001. See chapter 16.

Overdue tax bill. If you receive a bill for overdue taxes, do not ignore it. If you owe the tax shown on the bill, you should make arrangements to pay it. If you believe it is incorrect, contact the IRS immediately to suspend action until the mistake is corrected. See Publication 594, The IRS Collection Process, for more information.

Comments on IRS enforcement actions. The Small Business and Agricultural Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small business about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities of each agency and rate its responsiveness to small business. If you wish to comment on the enforcement actions of the IRS, you can:

• Call 1-888-734-3247,
• Send an e-mail to [email protected], or
• Download the appraisal form at www.sba.gov/regfair.

Treasury Inspector General for Tax Administration. If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (1-800-877-8339 for TTY/TDD users). You can remain anonymous.

Publication on employer identification numbers (EIN). Publication 1635, Understanding Your EIN, provides general information on employer identification numbers. Topics include how to apply for an EIN and how to complete Form SS-4.

Form W-4 for 2002. You should make new Forms W-4 available to your employees and encourage them to check their income tax withholding for 2002. Those employees who owed a large amount of tax or received a large refund for 2001 may need to file a new Form W-4. See Publication 919, How Do I Adjust My Tax Withholding.

Earned income credit. You, as an employer, must notify employees who worked for you and from whom you did not withhold income tax about the earned income credit. See chapter 16.

Form 1099-MISC. File Form 1099-MISC if you pay at least $600 in rents, services, and other income payments in your farming business to an individual (for example, an accountant, an attorney, or a veterinarian) who is not your employee.

Children employed by parents. Wages you pay to your children age 18 and older for services in your trade or business are subject to social security and Medicare taxes. See chapter 16.

Farmers and crew leaders must withhold income tax. Farmers and crew leaders must withhold federal income tax from farm workers who are subject to social security and Medicare taxes. See chapter 16.

Social security tests for seasonal farm workers. If you pay seasonal farm workers less than $150 in annual cash wages, the wages are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farm workers. The seasonal farm worker must meet certain tests. See chapter 16.

Medical savings accounts (MSAs). If you are covered only under a high deductible health plan, you may be able to participate in an Archer MSA program. You can deduct contributions to your Archer MSA even if you do not itemize your deductions. See Publication 969, Medical Savings Accounts (MSAs).

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