What IRS Form 945 (2018) Is For

IRS Form 945 is used to report federal income tax withheld from nonpayroll payments and distributions (IRS Instructions for Form 945 (2018)). You must file this form if you withheld federal income tax from pensions, military retirement, gambling winnings, Indian gaming profits, backup withholding, voluntary withholding on certain government payments, or dividends from Alaska Native Corporations during 2018.

When You'd Use Form 945 for 2018 (Late or Amended Filing)

You would file Form 945 for 2018 as a late return if you never filed the original return that was due January 31, 2019 (or February 11, 2019 if you made timely deposits). Common scenarios include receiving IRS notices demanding the unfiled return, discovering you had backup withholding obligations you never reported, or needing to establish a payment plan for outstanding liabilities. For refund claims, the statute of limitations generally requires filing within three years of the original due date, though unfiled returns have no statute of limitations for assessment (IRS.gov/irm/part25/irm_25-006-001r). Use Form 945-X for correcting administrative errors on previously filed returns.

Key Rules Specific to 2018

The 2018 tax year included new withholding rates under the Tax Cuts and Jobs Act, which lowered rates on certain voluntary withholding payments beginning January 1, 2018 (IRS Instructions for Form 945 (2018)). The lookback period for determining your 2018 deposit schedule was based on your 2016 Form 945 liability. Monthly depositors were required if your 2016 liability was $50,000 or less; semiweekly depositors if over $50,000. The $2,500 threshold for deposit requirements and the $100,000 next-day deposit rule applied as in other years.

Step-by-Step (High Level)

• Gather supporting documents: Obtain wage and income transcripts from IRS.gov/get-transcript, collect Forms 1099-R, 1099-MISC, W-2G, and any backup withholding records for 2018
  
  
• Complete the 2018 form: Use only the 2018 version of Form 945, enter federal income tax withheld on line 1, backup withholding on line 2, calculate penalties and interest manually
  
  
• Attach required schedules: Include Form 945-A if you were a semiweekly depositor or had monthly liabilities of $100,000 or more; attach explanatory statements for late filing
  
  
• File and pay: Mail to the appropriate IRS processing center (addresses changed in 2019), or e-file if available; pay balance due by electronic funds transfer if required
  
  
• Maintain records: Keep copies of the filed return, payment confirmations, and all supporting documentation for at least four years
  
  

Common Mistakes and How to Avoid Them

• Using the wrong form year: Always use the 2018 Form 945 for 2018 tax year obligations, not the current year form, as line numbers and requirements may differ
  
  
• Mixing payroll and nonpayroll withholding: Don't report W-2 wage withholding on Form 945; this belongs on Forms 941, 943, or 944 instead (IRS Instructions for Form 945 (2018))
  
  
• Incorrect deposit schedule determination: Base your 2018 deposit schedule on your 2016 Form 945 liability, not 2017, as the lookback period is two years prior
  
  
• Omitting backup withholding: Include all backup withholding from gambling, missing TINs, and underreporting situations on line 2, even if reported on various 1099 forms
  
  
• Filing multiple returns: Submit only one Form 945 per calendar year covering all nonpayroll withholding, regardless of how many different types of payments you made
  
  
• Ignoring penalties and interest: Calculate and include failure-to-file and failure-to-pay penalties, plus interest from the original due date when filing late
  
  

What Happens After You File

The IRS typically processes Form 945 within 6-8 weeks of receipt, though late-filed returns may take longer due to additional review procedures. You'll receive notices confirming receipt and any balance due calculations, including updated penalty and interest amounts. If you owe money and can't pay in full, you can request an installment agreement using Form 9465 or apply online at IRS.gov/OPA for balances under $25,000 (IRS.gov/payments/payment-plans-installment-agreements). The IRS may assess the Trust Fund Recovery Penalty against responsible persons if withheld taxes aren't paid. You have appeal rights if you disagree with any penalties or determinations, starting with a written explanation to the IRS office that issued the notice.

FAQs

What penalties apply for filing Form 945 late for 2018?

The failure-to-file penalty is 5% of unpaid tax per month (or part of month), up to 25% maximum. Failure-to-pay penalty is 0.5% per month, also capped at 25%. Interest accrues on both taxes and penalties from the original due date (IRS Instructions for Form 945 (2018)).

Can I still get a refund if I file Form 945 late for 2018?

Generally, you must file within three years of the original due date (by January 31, 2022) to claim refunds. However, if you never filed the original return, you may still be able to claim refunds for overpaid withholding, though the statute varies by situation.

How do I get transcripts to help prepare my late 2018 Form 945?

Request business tax transcripts at IRS.gov/businesses/get-a-business-tax-transcript or wage and income transcripts at IRS.gov/get-transcript. You can also call 800-908-9946 for business transcripts or use Form 4506-T.

Should I amend my state returns after filing a late federal Form 945?

Form 945 generally doesn't affect state income tax returns since it reports federal withholding on nonpayroll items. However, check with your state tax agency if you had state withholding on the same payments that wasn't properly reported.

What if I discover errors after filing my late Form 945 for 2018?

Use Form 945-X to correct administrative errors on previously filed Form 945 returns. File Form 945-X separately from any current-year returns, and include detailed explanations of the corrections (IRS.gov/forms-pubs/about-form-945-x).

Can the IRS prepare a substitute Form 945 if I don't file?

Yes, under IRC Section 6020(b), the IRS can prepare a substitute return based on available information, but this typically results in higher assessments and eliminates your opportunity to claim deductions or present mitigating circumstances (IRS.gov/irm/part4/irm_04-019-026r).

How long should I keep records after filing a late Form 945?

Keep all supporting records, including Forms 1099, deposit confirmations, and the filed return, for at least four years from the later of the due date or date filed. For unfiled returns, the IRS recommends keeping records indefinitely since there's no statute of limitations on assessment.

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