Texas 25 104 Form in PDF

Detailed Guide for Writing Texas 25 104

Filing the Texas 25-104 form is a straightforward process if you follow the appropriate steps. This form is essential for surplus lines agents and purchasing groups in Texas to accurately report and pay taxes due. It's crucial to take this obligation seriously to ensure compliance with Texas law. Each section of the form is designed to capture specific details about insurance premiums collected and taxes owed. By carefully entering the correct information, you can avoid common mistakes and potential penalties. Here's how to fill out the form step by step:

1. Start by entering the T Code "71120" and your Taxpayer number in the designated spaces at the top of the form.
2. If your mailing address has changed, blacken the box next to the statement indicating a change and update your address accordingly.
3. In SECTION I, specify your Texas premiums under the following categories:
   1. For A. Texas premiums A, enter the total Texas premiums for policies effective before July 21, 2011.
   2. For B. Texas premiums B, enter the total Texas premiums for policies effective on or after July 21, 2011.
   3. Report non-taxable premiums and other states' premiums where applicable in sections C, D, and E.
   4. Input the Total premium as agent of record in section G.
4. In SECTION II - Tax Base Election, choose either "Premium-written basis" or "Premium-received basis" by marking the appropriate box.
5. SECTION III focuses on the premiums subjected to tax. Fill in Texas premiums, Texas returned premiums, taxable premiums, and the premium tax due as per your selected taxation method.
6. Fill in similar details for SECTION IV if applicable, based on the coverage obtained from insurers licensed in Texas or surplus lines agents licensed in Texas.
7. Under the section for Total Taxes Due, calculate and enter your prepayment amount, total amount due, and any applicable penalty and interest.
8. Ensure the Taxpayer name and Taxpayer number are correctly filled in at the bottom of the form.
9. Calculate the Total Amount Due and Payable and include this amount in the space provided in Item 13.
10. Write your check payable to "STATE COMPTROLLER" for the amount in Item 13 and mail it to the provided address: COMPTROLLER OF PUBLIC ACCOUNTS, P.O. Box 149356, Austin, TX 78514-9356.
11. Sign the form in the designated "Authorized agent" space and fill in the preparer's name, daytime phone number, and date.

Once you have completed filling out the form and reviewing all the details for accuracy, you are ready to submit your report and payment. Timely and accurate filing is crucial to avoid any penalties or interest charges. Remember to keep a copy of the filled form and any correspondence for your records. Filing the Texas 25-104 form correctly helps ensure that you remain in good standing with the Texas Comptroller's office.

When filling out the Texas 25-104 form, which is necessary for all surplus lines agents and purchasing groups registered in Texas, people can sometimes make mistakes. This form, essentially for reporting insurance tax, has specific sections that are easy to overlook or fill out incorrectly. Below are five common mistakes made:

1. Not Updating Address Information: One of the checkboxes specifically asks if your mailing address has changed. It's important to blacken this box if there has been a change. Many forget to do so or ignore updating their information beside the preprinted data, leading to potential communication issues or delays in receiving pertinent information.

2. Incorrectly Reporting Premiums: In Section I, premiums must be divided into specific categories, including Texas premiums before and after a certain cut-off date, non-taxable premiums, other states' premiums, and more. Mistakes often occur when individuals inaccurately categorize these premiums or when they report premiums that have not yet been reported to the Surplus Lines Stamping Office of Texas (SLSOT).

3. Choosing the Wrong Tax Basis: In Section II, agents must elect to report tax on a premium-written basis or premium-received basis. This election is crucial and can only be changed every four years. Failing to make a selection or choosing the wrong basis can result in inaccurate tax reporting and potential penalties.

4. Omitting Returned Premiums: The form requires reporting of Texas returned premiums - the portion of the premium that is refunded to a policyholder. This detail is often overlooked by those reporting on a premium-received basis, as they do not have returned premiums. However, failing to report or incorrectly calculating these can lead to discrepancies and possible fines.

5. Forgetting To Check Specific Boxes in Section IV: Purchasing groups need to indicate whether their coverage is obtained from insurers licensed in Texas or surplus lines agents licensed in Texas, or is subject to tax on premiums paid for their members located in Texas. Failing to check the appropriate box or incorrectly reporting can lead to inaccuracies in whether tax is owed on the report.

Avoiding these mistakes requires careful attention to detail and a clear understanding of the form's requirements. When in doubt, consulting the specific instructions provided with the form or seeking professional advice can help ensure the form is completed correctly and on time.

When handling the Texas Form 25-104 for annual insurance tax reporting, several other forms and documents are often needed to complete the process accurately. These documents vary in purpose, from providing detailed information about the insurer's operations in and out of Texas, to ensuring compliance with specific tax provisions.

• Texas Surplus Lines Agent License Application: Prior to filing Form 25-104, agents must be licensed in Texas. This form is essential for those wishing to operate as surplus lines agents within the state.
• Appointment of Attorney for Service of Process: Companies operating in Texas must designate an attorney for service of process within the state. This document is crucial for legal notifications.
• Quarterly Premium Tax Statement: While Form 25-104 is filed annually, insurers often need to submit quarterly statements regarding their premium collections and tax liabilities.
• Non-Admitted Insurer Tax Report: For insurers not licensed in Texas but permitted to operate as surplus lines, this report adjusts for any tax obligations arising from their operations within the state.
• Annual Statement Schedule T: This document provides a breakdown of insurance operations by state and is vital for determining tax obligations accurately.
• Breakdown of States Summary: Linked closely with Section I, Item D of Form 25-104, this summary details premium allocations for multi-state policies, especially when Texas is the home state of the insured.
• Premium Tax Payment Voucher: Accompanies tax payments to ensure they are properly credited to the payer's account.
• Electronic Funds Transfer (EFT) Authorization Form: For those opting to make payments electronically, this form authorizes the transfer of funds to fulfill tax obligations.
• Request for Tax Clearance Certificate: Often required by businesses concluding operations or undergoing a change in status, this certificate confirms all tax liabilities have been satisfied.
• Insurance Tax Correction Form: Used to correct previously submitted information or tax payments related to insurance operations within the state.

Each of these documents plays a pivotal role in ensuring compliance with Texas insurance tax laws. They facilitate accurate reporting, timely payments, and adherence to regulatory requirements, supporting a seamless operational environment for insurers in the state. Being familiar with and understanding these documents ensures that companies can navigate the complexities of insurance taxation with confidence.

The Texas 25-104 form is closely related to the IRS Form 720, which is used for reporting federal excise taxes on specific services, goods, and transactions. Both forms are tax reporting documents, although they cater to different levels of governance and tax types. The IRS Form 720 covers a broad range of products and services at the federal level, while the Texas 25-104 specifically deals with insurance premium taxes within the state. They share similarities in their purpose to collect taxes relevant to their jurisdictions and require detailed accounting of taxable activities.

Similarly, the Texas 25-104 form bears resemblance to the NAIC (National Association of Insurance Commissioners) Quarterly and Annual Statements that insurance companies must file. These statements provide detailed financial information about an insurance company's operations, including premiums written and earned. The Texas 25-104 form requires similar information but is focused on the taxes due on insurance premiums, especially for surplus lines agents and purchasing groups operating within Texas. Both sets of documents are crucial for regulatory compliance and financial transparency in the insurance industry.

The Uniform Commercial Code (UCC) filing forms, such as UCC-1, also share similarities with the Texas 25-104 form in that both are used for regulatory compliance and reporting. However, UCC filings are primarily concerned with the declaration of personal property as collateral for loans, while the Texas 25-104 focuses on insurance premium tax reporting. Despite their different purposes, both types of forms are essential for legal documentation and have specific filing requirements and deadlines that must be adhered to.

Another comparable document is the Texas Franchise Tax Report, which businesses operating in Texas must file annually. Like the Texas 25-104 form, the franchise tax report is used to calculate taxes owed to the state, though it is based on the business's revenue rather than insurance premiums. Both forms are essential for entities to remain in compliance with state tax obligations and contribute to the state's revenue from different sources.

The California Insurance Tax Return forms, similar to those used by the California Department of Insurance, offer a parallel to the Texas 25-104 form, but for insurance companies operating in California. These tax returns require insurance companies to report premiums received and taxes due to the state of California. This demonstrates how different states have comparable reporting requirements for insurance-related taxes, tailored to their specific tax laws and regulations.

The Texas Mixed Beverage Gross Receipts Tax Report is another form with similarities to the Texas 25-104. Though it pertains to taxes on gross receipts from the sale of mixed beverages rather than insurance premiums, both forms are used by entities operating within Texas to report taxable activities and calculate taxes owed to the state. The commitment to fulfilling state tax obligations and ensuring accurate financial reporting is a common thread between these forms.

When filling out the Texas 25-104 form, please consider the following guidelines to ensure the process is completed accurately and efficiently:

• Review each section carefully to ensure all information provided is correct and complete. This includes taxpayer information, premium amounts, and tax calculations.
• Use the correct tax period and due dates as outlined in the form instructions to avoid penalties or interest for late submissions.
• Blacken the box if your mailing address has changed and provide the updated information beside the preprinted information to ensure all communications reach you without delay.
• Check the electronic reporting and payment options for an efficient and secure way to submit your form and payment.

• Forget to sign and date the form. An unsigned form is considered incomplete and will not be processed.
• Overlook reviewing the specific instructions for each section, such as premium reporting methods and the reporting of taxable and non-taxable premiums, to ensure accuracy.
• Miscalculate the penalty and interest if applicable. Use the correct rates as provided on the form instructions or the comptroller's website.
• Ignore the deadlines for filing and payment submission. Late submissions can result in penalties and interest charges that increase your total amount due.

Misconceptions about the Texas 25-104 form can lead to confusion and filing errors. Here are six common misunderstandings clarified:

• All surplus lines agents must file a report regardless of activity. Some may think they only need to file if they owe tax, but in reality, all surplus lines agents and purchasing groups registered in Texas must file the 25-104 form annually, even if no tax is due.
• Changing your tax base election is restricted. Agents can choose between a premium-written basis or a premium-received basis for their tax reporting. However, this election is not as flexible as some believe. It can only be changed every four years, and changing from a premium-received to a premium-written basis requires paying taxes on all outstanding receivables.
• Texas premiums are based on the location of the risk. It's a misconception that all premiums reported must be taxed. In fact, premiums need to be allocated correctly according to where the risk is located. For policies effective before July 21, 2011, premiums covering risks in Texas are taxable, whereas for policies effective on or after that date, it depends if Texas is the insured's home state.
• Premiums reported in Section III match those in Section I. This is not necessarily true. The premiums in Section III should reflect the taxation method chosen and may not match the premiums shown in Section I due to this difference in reporting methods.
• Non-taxable premiums do not need to be reported. Even non-taxable premiums must be reported on the form. This includes premiums exempt from taxation or preempted from state taxation under federal law. Wrongly believing they do not need to be included can lead to underreporting.
• Penalties and interest are negotiable. Some might think penalties and interest for late payments can be negotiated or waived by the Comptroller's office. However, these are calculated based on set percentages and interest rates. If tax is paid late, a penalty of 5% to 10%, plus interest, is automatically applied depending on how late the payment is made.

Understanding these details ensures accurate and timely filing of the Texas 25-104 form, helping to avoid common pitfalls and compliance issues.

When dealing with the Texas 25-104 form, it's crucial to understand the intricacies and obligations involved. Here are nine key takeaways to assist in accurately filling out and using the form:

• Who must file: All surplus lines agents licensed in Texas and purchasing groups registered in Texas are required to file this report, regardless of whether tax is due.
• Deadline: The report and any associated payment are due by March 1 of the year following the tax year.
• Sections of importance: The form is divided into several sections, each designed to capture specific information regarding premiums, both taxable and non-taxable, within and outside of Texas.
• Reporting method: Agents have the option to report tax on a premium-written or premium-received basis and can change their reporting method once every four years. Choosing one over the other has implications on the tax calculation.
• Tax base election: If an agent fails to elect their preferred tax base, they will automatically be taxed on a premium-written basis.
• Address and mailing changes: It's important to indicate on the form if there has been a change in mailing address to ensure all correspondence and documents reach the correct destination.
• Penalty and interest for late payment: Penalties are applied for payments made 1-30 days late (5% penalty) and increase if the payment is over 60 days late, to which interest is also added.
• Electronic filing options: The Texas Comptroller's office offers electronic reporting and payment options, available 24/7, which can streamline the submission process.
• Understanding non-taxable premiums: Premiums for policies covering risks located entirely in Texas or in federal waters, among others, are exempt from the surplus lines premium tax, yet need to be accurately reported.

Completing the Texas 25-104 form requires attention to detail and an understanding of the tax implications for surplus lines insurance. By taking into account these key points, agents and purchasing groups can ensure they meet their reporting obligations accurately and on time.