Form 945-A - Annual Record Of Federal Tax Liability (Page 3 of 3) in pdf

Form 945-A (Rev. 10-95)

Page

Paperwork Reduction Act Notice.—We ask for the information

Example A. Company A, which has a semiweekly deposit

on this form to carry out the Internal Revenue laws of the United

schedule, makes periodic payments on gambling winnings on

States. You are required to give us this information. We need it

the 15th day of each month. On December 20, 1995, in addition

to ensure that you are complying with these laws and to allow

to its periodic payments, it withheld from a payment on

us to figure and collect the right amount of tax.

gambling winnings under the backup withholding rules. Since

Company A is a semiweekly schedule depositor, it must record

The time needed to complete and file this form will vary

these nonpayroll withholding liabilities on Form 945-A. It must

depending on individual circumstances. The estimated average

report tax liabilities on line 15 for each month and line 20 for

time is:

December. Company A enters the monthly totals on lines A

Recordkeeping

8 hr., 37 min.

through L. It adds these monthly subtotals and enters the total

Preparing and sending

tax liability for the year on line M. The amount on line M should

the form to the IRS

8 min.

equal line 4 of Form 945.

If you have comments concerning the accuracy of these time

Example B. Company B is a semiweekly schedule depositor.

estimates or suggestions for making this form simpler, we would

During January, it withheld income tax on pension distributions

be happy to hear from you. You can write to the IRS at the

as follows: $52,000 on January 13; $35,000 on January 27.

address listed in the instructions of the tax return with which this

Since Company B is a semiweekly schedule depositor, it must

form is filed.

record its income tax withholding liabilities on Form 945-A. It

must record $52,000 on line 13 and $35,000 on line 27 for

January.

General Instructions

Example C. Because Company C is a new business, it is a

Purpose of form.—Use this form to report nonpayroll income

monthly schedule depositor for 1995. During January, it withheld

tax withholding on a daily basis. These nonpayroll items include

income tax on nonpayroll payments as follows: $2,000 on

backup withholding and withholding on pensions, annuities,

January 13; $99,000 on January 27. The deposit rules require

IRAs, Indian gaming profits, and gambling winnings. Also use

that a monthly schedule depositor begin depositing on a

Form 945-A to report tax liabilities reported on Form CT-1,

semiweekly deposit schedule when a $100,000 or more tax

Employer’s Annual Railroad Retirement Tax Return. If you are a

liability is accumulated on any day within a deposit period (see

Form CT-1 filer, refer to Part II of the Form CT-1 for additional

section 11 of Circular E for details). Since Company C

information that must be reported on Form 945-A.

accumulated $101,000 ($2,000 + $99,000) on January 27, 1995,

it became a semiweekly schedule depositor. Company C must

Note: Form 945-A is a summary of your tax liability, not a

complete Form 945-A and file it with Form 945. It must record

summary of deposits made.

$2,000 on line 13 and $99,000 on line 27 for January. No entries

Who must file.—Semiweekly schedule depositors are required

should be made on line 8 of Form 945 although Company C was

to complete and file Form 945-A with Form 945 or CT-1. Do not

a monthly depositor until January 27.

complete this form if you are a monthly schedule depositor,

Adjustments.—Semiweekly depositors must report adjustments

unless you accumulate a tax liability of $100,000 during any

on Form 945-A to correct administrative errors on prior returns.

month of the year. Monthly schedule depositors who accumulate

(Reminder: You will not be allowed a refund or credit for any

$100,000 become semiweekly schedule depositors for the

prior year overpayment of income tax that you withheld or

remainder of the year and must complete Form 945-A for the

deducted from a payee.) See the Instructions for Form 945 and

entire year. The deposit rules, including the $100,000 deposit

section 13 of Circular E for information on correcting

rule, are explained in section 11 of Circular E, Employer’s Tax

administrative errors. (The Circular E instructions for making

Guide, and the Instructions for Form 945.

adjustments refer to Form 941, but also apply to Form 945

Important.—Form 945-A is used by the IRS to match your tax

adjustments.) If the adjustment increases your current liability,

liability reported on this form with your deposits made with Form

report the adjustment on the entry space corresponding to the

8109 and to determine if you have deposited your withholding

date the error was discovered.

tax liabilities on time. Unless Form 945-A is properly completed

If the adjustment decreases your current liability, use the

and filed with Form 945, the IRS will not be able to process your

adjustment amount as a credit to offset subsequent liabilities

return and will have to contact you for the missing information.

until it is used up. For example, on January 10, 1995, Company

Deposit withheld income tax (including backup withholding)

D discovered that a mathematical error was made on a prior

with an authorized financial institution or the Federal Reserve

period return, resulting in a $10,000 overstatement of nonpayroll

bank or branch that serves your area. Include Form 8109,

income tax withholding. Since the correct amounts were

Federal Tax Deposit Coupon, with each deposit. Please see the

withheld and reported on Forms 1099-R, this is an administrative

instructions in the front of the coupon book for more information.

error that can be corrected on Form 945. It made payments

subject to nonpayroll income tax withholding on January 6, 13,

Specific Instructions

20, and 27 and had a $5,000 tax liability for each of those pay

If you are required to report your tax liabilities on Form 945-A as

dates. On Form 945-A Company D must report $5,000 on line 6

discussed above, file it with Form 945. Do not complete entries

for January. The adjustment for the $10,000 overstatement is

A through M of the Monthly Summary of Federal Tax Liability

used to offset the January 13 and 20 liabilities, so these two

(line 8 on Form 945). However, be sure to mark the semiweekly

$5,000 liabilities are not deposited or reported on Form 945-A.

schedule depositor checkbox above line 8.

The $5,000 liability for January 27 must be reported on line 27

for January.

Each numbered space on Form 945-A corresponds to dates

during the year. Report your tax liabilities corresponding to the

dates payments are made, not to when the liabilities are

accrued. For example, if you became liable for a pension

distribution on December 31, 1994, but did not make the

distribution until January 3, 1995, the income tax withholding

liability for the distribution should be reported on Form 945-A for

1995 on line 3 for January.

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Form 945-A - Annual Record Of Federal Tax Liability Page 3

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