The Texas 25 104 form is a tax report required for surplus lines agents and purchasing groups registered in Texas. This form allows individuals and entities to report Texas premiums and calculate any taxes due. Filing must occur annually, with deadlines set for March 1 of the year following the tax year.
The Texas 25-104 form serves as a crucial tool for surplus lines agents and purchasing groups operating within the state. This annual insurance tax report is designed to ensure compliance with state tax regulations, specifically under Chapters 552 and 559 of the Government Code. The form requires agents to detail various premiums, including Texas premiums, non-taxable premiums, and premiums from other states. By categorizing these amounts, agents can accurately report their tax obligations. The form is divided into several sections, each focusing on different aspects of premium reporting, such as the tax base election and the calculation of taxable premiums. It also outlines important deadlines, with the report and payment due by March 1 of the year following the tax year. Additionally, agents must indicate any changes to their mailing addresses and can face penalties for late submissions. Understanding the nuances of the 25-104 form is essential for agents to navigate their tax responsibilities effectively, ensuring that they remain compliant while also minimizing potential penalties.
When filling out the Texas 25-104 form, it’s important to follow certain guidelines to ensure accuracy and compliance. Here’s a list of what to do and what to avoid:
The Texas 25-104 form is an annual insurance tax report that must be filed by surplus lines agents licensed in Texas and purchasing groups registered in Texas. This form is essential for reporting premiums and calculating the tax owed for the previous tax year. Even if no tax is due, it is mandatory for these entities to submit this report. The filing deadline is March 1 of the year following the tax year.
All surplus lines agents licensed in Texas must file the Texas 25-104 form. Additionally, purchasing groups that are registered in Texas are also required to submit this report. This requirement holds true regardless of whether any tax is owed. It is crucial for these entities to ensure compliance with the state’s tax regulations.
The form includes several sections that capture detailed information about premiums. Specifically, it requires the reporting of:
This structured approach helps ensure accurate reporting and tax calculations based on the specific nature of the insurance policies.
Taxable premiums are calculated based on the reporting method you choose—either a premium-written basis or a premium-received basis. The form includes specific sections where you will enter the total taxable premiums. It is important to note that these figures may not match those reported in other sections of the form, as they are based on the selected method of reporting. Understanding these distinctions is key to accurately completing the form.
If the Texas 25-104 form is filed late, penalties and interest may apply. For example, if the tax is paid 1 to 30 days late, a penalty of 5% of the total amount due will be assessed. If the payment is 31 to 60 days late, the penalty increases to 10%. For payments that are over 60 days late, the same 10% penalty applies, along with interest calculated at the rate published by the state. It is advisable to file on time to avoid these additional charges.
For assistance with the Texas 25-104 form, you can contact the Texas Comptroller of Public Accounts. They provide a dedicated phone line at 1-800-252-1387 for inquiries related to insurance tax. Additionally, detailed instructions and resources are available online at the Texas Comptroller's website, which can guide you through the completion process and clarify any uncertainties you may have.
Filling out the Texas 25-104 form is an essential task for surplus lines agents and purchasing groups registered in Texas. Completing this form accurately ensures compliance with state tax regulations. Follow these steps carefully to ensure all necessary information is provided.
After completing these steps, ensure that you keep a copy of the submitted form and any attachments for your records. This will help you in case of any future inquiries or audits regarding your tax filings.
Filling out the Texas 25-104 form can be a straightforward task, but many people make common mistakes that can lead to delays or issues with their filings. One frequent error is not updating the taxpayer's mailing address. If the address has changed, it is crucial to blacken the box indicating this change and provide the new information. Failing to do so can result in important correspondence being sent to the wrong location.
Another mistake is neglecting to review the preprinted information on the form. Many individuals assume that the preprinted details are accurate and do not verify them. It's essential to double-check this information, as any inaccuracies can lead to complications in processing the form.
In Section I, errors often occur in reporting Texas premiums. Individuals sometimes mix up the categories for premiums effective before and after July 21, 2011. Each category has specific reporting requirements, and misclassifying premiums can lead to incorrect tax calculations. This is a critical area where attention to detail is necessary.
People also frequently overlook the importance of itemizing non-taxable premiums correctly. Misunderstanding which premiums qualify as non-taxable can result in incorrect reporting. It is vital to know the distinctions between taxable and non-taxable premiums to avoid penalties.
In Section II, some filers fail to select the appropriate tax base option. The form provides two choices: premium-written and premium-received. Not making a selection or choosing the wrong option can lead to unexpected tax liabilities. Agents should be aware of their election and ensure it aligns with their reporting method.
Another common issue arises in Section III, where individuals may not accurately reflect the premiums subject to tax based on their chosen method. This section requires careful consideration to ensure that all reported premiums are consistent with the selected reporting basis.
Additionally, some filers neglect to report returned premiums correctly. This can lead to discrepancies in the total amount due. It is essential to report any unearned premiums credited or refunded accurately to avoid potential penalties.
Finally, many people fail to pay attention to the penalties and interest outlined in Item 12. Not calculating these correctly can result in unexpected fees. Understanding the timeline for payments and the corresponding penalties for late submissions is crucial for compliance.
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