Get How To Fill Out A 9452

Backup withholding is the IRS's method of ensuring that taxpayers who forget to report certain kinds of income still end up paying the taxes that they owe, usually to the detriment of the taxpayer (i.e. overpaying). This is because many taxpayers pay taxes through their employer or the business they work for.

Form 945 is used to report to the IRS taxes withheld from non-payroll payments made for a variety of reasons. One source of these withheld taxes is backup withholding, but some gambling winnings and military retirement benefits must have taxes withheld and these would be reported on this form as well.

Filling Out Form 945 Line 1: Enter the federal income tax withheld for all payees except for backup withholding. Line 2: Enter the total backup withholding for the year. Line 3: Total of Lines 1 and 2. Line 4: Enter the total deposits you made for the year.

U.S. citizens or resident aliens are considered exempt from backup withholding if their reported name and Social Security Number matches the IRS records. Additionally, you are exempt if you have not been notified by the IRS that you are subject to mandatory backup withholding.

When it applies, backup withholding requires a payer to withhold tax from payments not otherwise subject to withholding. You may be subject to backup withholding if you fail to provide a correct taxpayer identification number (TIN) when required or if you fail to report interest, dividend, or patronage dividend income.

Business and other payers generally don't withhold taxes from payments reported on Forms 1099 and W-2G. There are, however, situations when a payer must withhold 24% of the payment to ensure the IRS receives the tax due on this income. This is known as backup withholding.

A payer files a tax return on Form 945 for backup withholding. You may be required to file Forms 1099 and 1096, and, if appropriate, backup withhold on Form 945, even if you do not make the payments directly to that U.S. person.