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1040 Ez Forms 2012

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1040 Ez Forms 2012

1040 ez forms 2012 Publication 901 - Main Content Table of Contents Application of Treaties Tax Exemptions Provided by TreatiesPersonal Services Income Professors, Teachers, and Researchers Students and Apprentices Wages and Pensions Paid by a Foreign Government Explanation of TablesTable 1 Table 2 Table 3 Application of Treaties The United States has income tax treaties with a number of foreign countries. 1040 ez forms 2012 Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income taxes on certain items of income they receive from sources within the United States. 1040 ez forms 2012 These reduced rates and exemptions vary among countries and specific items of income. 1040 ez forms 2012 If there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR. 1040 ez forms 2012 Also see Publication 519. 1040 ez forms 2012 Many of the individual states of the United States tax the income of their residents. 1040 ez forms 2012 Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income. 1040 ez forms 2012 Tax treaties reduce the U. 1040 ez forms 2012 S. 1040 ez forms 2012 taxes of residents of foreign countries. 1040 ez forms 2012 With certain exceptions, they do not reduce the U. 1040 ez forms 2012 S. 1040 ez forms 2012 taxes of U. 1040 ez forms 2012 S. 1040 ez forms 2012 citizens or residents. 1040 ez forms 2012 U. 1040 ez forms 2012 S. 1040 ez forms 2012 citizens and residents are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax on their worldwide income. 1040 ez forms 2012 Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. 1040 ez forms 2012 S. 1040 ez forms 2012 citizen or resident who receives income from a treaty country may refer to the tables in this publication to see if a tax treaty might affect the tax to be paid to that foreign country. 1040 ez forms 2012 Foreign taxing authorities sometimes require certification from the U. 1040 ez forms 2012 S. 1040 ez forms 2012 Government that an applicant filed an income tax return as a U. 1040 ez forms 2012 S. 1040 ez forms 2012 citizen or resident, as part of the proof of entitlement to the treaty benefits. 1040 ez forms 2012 See Form 8802, Application for United States Residency Certification, to request a certification. 1040 ez forms 2012 Disclosure of a treaty-based position that reduces your tax. 1040 ez forms 2012   If you take the position that any U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax is overruled or otherwise reduced by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. 1040 ez forms 2012 If you are not required to file a return because of your treaty-based position, you must file a return anyway to report your position. 1040 ez forms 2012 The filing of Form 8833 does not apply to a reduced rate of withholding tax on noneffectively connected income, such as dividends, interest, rents or royalties, or to a reduced rate of tax on pay received for services performed as an employee, including pensions, annuities, and social security. 1040 ez forms 2012 For more information, see Publication 519 and the Form 8833 instructions. 1040 ez forms 2012   If you fail to file Form 8833, you may have to pay a $1,000 penalty. 1040 ez forms 2012 Corporations are subject to a $10,000 penalty for each failure. 1040 ez forms 2012 Tax Exemptions Provided by Treaties In addition to the tables in the back of this publication, this publication contains discussions of the exemptions from tax and certain other effects of the tax treaties on the following types of income. 1040 ez forms 2012 Pay for certain personal services performed in the United States. 1040 ez forms 2012 Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. 1040 ez forms 2012 Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. 1040 ez forms 2012 Wages, salaries, and pensions paid by a foreign government. 1040 ez forms 2012 Personal Services Income Pay for certain personal services performed in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if you are a resident of one of the countries discussed below, if you are in the United States for a limited number of days, and if you meet certain other conditions. 1040 ez forms 2012 For this purpose, the word “day” means a day during any part of which you are physically present in the United States. 1040 ez forms 2012 Terms defined. 1040 ez forms 2012   Several terms appear in many of the discussions that follow. 1040 ez forms 2012 The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. 1040 ez forms 2012 The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. 1040 ez forms 2012   The terms fixed base and permanent establishment generally mean a fixed place of business, such as a place of management, a branch, an office, a factory, a warehouse, or a mining site, through which an enterprise carries on its business. 1040 ez forms 2012   The term borne by generally means having ultimate financial accounting responsibility for, or providing the monetary resources for, an expenditure or payment, even if another entity in another location actually made the expenditure or payment. 1040 ez forms 2012 Australia Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if: The residents are in the United States for no more than 183 days during the tax year, The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States. 1040 ez forms 2012 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Australia who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Austria Income that residents of Austria receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Austria who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Income received by a resident of Austria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 Bangladesh Income that residents of Bangladesh receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, or Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to pubic entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Bangladesh who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Regardless of these limits, income of Bangladesh entertainers is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if their visit to the United States is wholly or mainly supported by public funds of Bangladesh, its political subdivisions, or local authorities. 1040 ez forms 2012 Income received from employment as a member of the regular complement of a ship or an aircraft operated by a Bangladesh enterprise in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 If the ship or aircraft is operated by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise, the income is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 If the resident of Bangladesh is a shareholder in a U. 1040 ez forms 2012 S. 1040 ez forms 2012 corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. 1040 ez forms 2012 S. 1040 ez forms 2012 corporation. 1040 ez forms 2012 The amount received by the shareholder that is more than the amount paid to a director that is not a shareholder is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax at the rate of 15%. 1040 ez forms 2012 Barbados Income that residents of Barbados receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Earn net income for independent services provided to U. 1040 ez forms 2012 S. 1040 ez forms 2012 residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. 1040 ez forms 2012 S. 1040 ez forms 2012 residents), and Do not have a regular base available in the United States for performing the services. 1040 ez forms 2012 If they have a regular base available in the United States but otherwise meet the conditions for exemption, they are taxed only on the income attributable to the regular base. 1040 ez forms 2012 Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the residents meet four requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days during the calendar year. 1040 ez forms 2012 The income earned in the calendar year in the United States is not more than $5,000. 1040 ez forms 2012 Their income is paid by or for an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or regular base of the employer in the United States. 1040 ez forms 2012 Income of a Barbadian resident from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to Barbadian resident public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $250 per day or $4,000 in the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 1040 ez forms 2012 However, the exemptions do apply regardless of these limits on gross receipts if the entertainer's visit to the United States is substantially supported by Barbadian public funds or if the entertainer's services are provided to a nonprofit organization. 1040 ez forms 2012 Belgium Income that residents of Belgium receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040 ez forms 2012 Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to directors' fees and similar payments received by a resident of Belgium for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Belgium who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Income received by a resident of Belgium for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 Bulgaria Income that residents of Bulgaria receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040 ez forms 2012 Under Article 5 (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 1040 ez forms 2012 Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to directors' fees and similar payments received by a resident of Bulgaria as a member of the board of directors of a U. 1040 ez forms 2012 S. 1040 ez forms 2012 company. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Bulgaria who earn more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Income received by a resident of Bulgaria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 Canada Income that residents of Canada receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article VII (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040 ez forms 2012 Under Article V (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 1040 ez forms 2012 Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if it is not more than $10,000 for the year. 1040 ez forms 2012 If the income is more than $10,000 for the year, it is exempt only if: The residents are present in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and The income is not paid by, or on behalf of, a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident, and is not borne by a permanent establishment in the United States. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Canada who derive more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the calendar year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 However, this article does not apply to athletes participating in team sports in leagues with regularly scheduled games in both Canada and the United States. 1040 ez forms 2012 Pay received by a resident of Canada for employment regularly done in more than one country on a ship, aircraft, motor vehicle, or train operated by a Canadian resident is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 China, People's Republic of Income that residents of the People's Republic of China receive for personal services as independent contractors or self-employed individuals (independent personal services) that they perform during the tax year in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are present in the United States for no more than 183 days in the calendar year, and Do not have a fixed base regularly available in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 1040 ez forms 2012 Pay received by residents of the People's Republic of China for services performed as employees (dependent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if: The residents are present in the United States for no more than 183 days in the calendar year, The pay is paid by or for an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees for service on the board of directors of a U. 1040 ez forms 2012 S. 1040 ez forms 2012 corporation. 1040 ez forms 2012 These exemptions generally do not apply to income received as a public entertainer (such as a theater, motion picture, radio, or television artist, musician, or athlete). 1040 ez forms 2012 However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. 1040 ez forms 2012 S. 1040 ez forms 2012 and Chinese governments is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Commonwealth of Independent States Income that residents of a C. 1040 ez forms 2012 I. 1040 ez forms 2012 S. 1040 ez forms 2012 member receive for performing personal services in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if those residents are in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated in international traffic by a C. 1040 ez forms 2012 I. 1040 ez forms 2012 S. 1040 ez forms 2012 member or a resident of a C. 1040 ez forms 2012 I. 1040 ez forms 2012 S. 1040 ez forms 2012 member is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Cyprus Income that residents of Cyprus receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are present in the United States for less than 183 days in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 1040 ez forms 2012 Pay received by residents of Cyprus from services performed as employees (dependent personal services), including services as an officer of a corporation, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if: The residents are in the United States for less than 183 days during the tax year, The pay is paid by or for an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident, and The pay is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 1040 ez forms 2012 Pay received by a Cyprus resident for performing personal services as an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of Cyprus is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to Cyprus resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $500 per day or $5,000 for the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 1040 ez forms 2012 Directors' fees received by residents of Cyprus for service on the board of directors of a U. 1040 ez forms 2012 S. 1040 ez forms 2012 corporation are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax to the extent of a reasonable fixed amount payable to all directors for each day of attendance at directors' meetings held in the United States. 1040 ez forms 2012 Czech Republic Income that residents of the Czech Republic receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are present in the United States for no more than 183 days in any 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040 ez forms 2012 Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following three requirements are met. 1040 ez forms 2012 The resident is present in the United States for no more than 183 days in any 12-month period. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to income residents of the Czech Republic receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year. 1040 ez forms 2012 Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if their visit to the United States is substantially supported by public funds of the Czech Republic, its political subdivisions, or local authorities, or the visit is made pursuant to a specific arrangement between the United States and the Czech Republic. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of the Czech Republic as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 Income from employment as a member of the regular complement of a ship or aircraft operated by a Czech enterprise in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 If the ship or aircraft is operated by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise, the income is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Denmark Income that residents of Denmark receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Denmark as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, and athletes) from Denmark who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Income received by a resident of Denmark for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 Egypt Income that residents of Egypt receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they are in the United States for no more than 89 days during the tax year. 1040 ez forms 2012 Income that residents of Egypt receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet four requirements. 1040 ez forms 2012 They are in the United States for no more than 89 days during the tax year. 1040 ez forms 2012 They are employees of a resident of, or a permanent establishment in, Egypt. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 Their income is subject to Egyptian tax. 1040 ez forms 2012 This exemption does not apply to pay received by a resident of Egypt who is an employee and member of the regular complement of a ship or an aircraft operated in international traffic by a resident of the United States. 1040 ez forms 2012 These exemptions do not apply to Egyptian resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes), who earn income for services as public entertainers if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 1040 ez forms 2012 Estonia Income that residents of Estonia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following requirements are met. 1040 ez forms 2012 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Estonia as a member of the board of directors or similar body of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a United States enterprise is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to income residents of Estonia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040 ez forms 2012 Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if their visit to the United States is wholly or mainly supported by public funds of Estonia, its political subdivisions, or local authorities. 1040 ez forms 2012 Finland Income that residents of Finland receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Finland receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days during any 12-month period. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to pay received by a resident of Finland who is an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of the United States. 1040 ez forms 2012 These exemptions do not apply to income residents of Finland receive as public entertainers or sportsmen if the gross income, including reimbursed expenses, is more than $20,000 for their personal activities in the United States during the calendar year. 1040 ez forms 2012 France Income that residents of France receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of France receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 Income for services performed by a resident of France as an employee and member of the regular complement of a ship or an aircraft operated in international traffic is exempt from tax in the United States. 1040 ez forms 2012 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, or musicians), or sportsmen from France who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Regardless of these limits, income of French entertainers or sportsmen is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their visit is principally supported by public funds of France. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of France as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 Germany Income that residents of Germany receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040 ez forms 2012 Income that residents of Germany receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the residents meet three requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days during the calendar year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 Pay received by a resident of Germany for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 The exemption does not apply to directors' fees and other similar payments received by a resident of Germany for services performed in the United States as a member of the board of directors of a company resident in the United States. 1040 ez forms 2012 Income residents of Germany receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their gross receipts, including reimbursed expenses, from their entertainment activities in the United States are more than $20,000 during the calendar year. 1040 ez forms 2012 Income of German entertainers or athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. 1040 ez forms 2012 Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. 1040 ez forms 2012 The pay, regardless of amount, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 Hungary Income that residents of Hungary receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available in the United States. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Hungary receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 Their income is paid by or on behalf of an employer who is not a resident of the United States. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated by a Hungarian enterprise in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 If the ship or aircraft is operated by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise, the pay is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Iceland Income that residents of Iceland receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040 ez forms 2012 Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to directors' fees and similar payments received by a resident of Iceland as a member of the board of directors of a U. 1040 ez forms 2012 S. 1040 ez forms 2012 company. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Iceland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Income received by a resident of Iceland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 India Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are present in the United States for no more than 89 days during the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040 ez forms 2012 Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are present in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to pay received by a resident of India for services performed as an employee aboard a ship or aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by an Indian resident as a member of the board of directors of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 These exemptions do not apply to income residents of India receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their net income is more than $1,500 during the tax year for their entertainment activities in the United States. 1040 ez forms 2012 Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their visit to the United States is wholly or substantially supported from the public funds of the Indian Government, its political subdivisions, or local authorities. 1040 ez forms 2012 Indonesia Income that residents of Indonesia receive for performing personal services as individual contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are present in the United States for no more than 119 days during any consecutive 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are present in the United States no more than 119 days during any consecutive 12-month period. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne or reimbursed by a permanent establishment the employer has in the United States. 1040 ez forms 2012 Pay received by an individual for services performed as an employee aboard a ship or aircraft operated by an Indonesian resident in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the individual is a member of the regular complement of the ship or aircraft. 1040 ez forms 2012 These exemptions do not apply to income residents of Indonesia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their gross receipts, including reimbursed expenses, are more than $2,000 during any consecutive 12-month period. 1040 ez forms 2012 Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their visit to the United States is substantially supported or sponsored by the Indonesian Government and the Indonesian competent authority certifies that the entertainers or athletes qualify for this exemption. 1040 ez forms 2012 Ireland Income that residents of Ireland receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Ireland as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 However, amounts received for attending meetings in Ireland are not subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 Income received by a resident of Ireland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax. 1040 ez forms 2012 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Ireland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Israel Income that residents of Israel receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they are in the United States for no more than 182 days during the tax year. 1040 ez forms 2012 Income that residents of Israel receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet four requirements. 1040 ez forms 2012 They are in the United States for no more than 182 days during the tax year. 1040 ez forms 2012 They are employees of a resident of, or a permanent establishment in, Israel. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 Their income is subject to Israeli tax. 1040 ez forms 2012 The exemption does not apply to pay received by an employee for labor or personal services performed as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 These exemptions do not apply to income that residents of Israel receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes), if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 1040 ez forms 2012 Italy Income that residents of Italy receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Italy receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following requirements are met. 1040 ez forms 2012 The residents are in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Italy for services performed in the United States as a member of the board of directors of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to income residents of Italy receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) if they are present in the United States for more than 90 days during the tax year or their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year for their entertainment activities in the United States. 1040 ez forms 2012 Jamaica Income that residents of Jamaica receive for the performance of personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Do not have a fixed base regularly available to them in the United States for performing their services, and Earn net income for those services that is not more than $5,000 during the tax year if the income is from a U. 1040 ez forms 2012 S. 1040 ez forms 2012 contractor. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed only on the income that is attributable to the fixed base. 1040 ez forms 2012 There is no dollar limit for condition (3) if the contractor is from a country other than the United States. 1040 ez forms 2012 Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet four requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 Their income is paid by or for an employer who is not a resident of the United States. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 Their net income received for the services is not more than $5,000 during the tax year. 1040 ez forms 2012 Pay received from employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a Jamaican enterprise is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 If the ship or aircraft is operated by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise, the pay is subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to income that residents of Jamaica receive for performing services in the United States as entertainers, such as theater, motion picture, radio, or television artists, musicians, or athletes, if the gross receipts (excluding reimbursements for expenses) from the services are more than $400 a day or $5,000 for the tax year. 1040 ez forms 2012 Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. 1040 ez forms 2012 S. 1040 ez forms 2012 corporations are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the fees (excluding reimbursed expenses) are not more than $400 per day for each day the directors are present in the United States to perform the services. 1040 ez forms 2012 Japan Income that residents of Japan receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (business profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 1040 ez forms 2012 Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to directors' fees and similar payments received by a resident of Japan for services performed as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 The exemption does not apply to a resident of Japan who performs services as an employee aboard a ship or an aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Japan who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Kazakhstan Income that residents of Kazakhstan receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if: The residents are in the United States for no more than 183 days in any consecutive 12-month period, and The income is not attributable to a fixed base in the United States which is regularly available to the residents. 1040 ez forms 2012 If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following three requirements are met. 1040 ez forms 2012 The resident is in the United States for no more than 183 days in any 12-month period. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 Income derived by a resident of Kazakhstan from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Kazakhstan as a member of the board of directors or similar body of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Korea, South Income that residents of South Korea receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the residents: Are in the United States for no more than 182 days during the tax year, Earn income for those services that is not more than $3,000 during the tax year, and Do not maintain a fixed base in the United States for more than 182 days during the tax year. 1040 ez forms 2012 If they maintain a fixed base in the United States for more than 182 days, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Korea receive for labor or personal services performed in the United States as employees (dependent personal services), including pay for services performed as an officer of a corporation, is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the residents meet four requirements. 1040 ez forms 2012 They are in the United States for no more than 182 days during the tax year. 1040 ez forms 2012 They are employees of a resident of Korea or of a permanent establishment maintained in Korea. 1040 ez forms 2012 Their compensation is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 Their income for those services is not more than $3,000. 1040 ez forms 2012 Pay received by employees who are members of the regular complement of a ship or aircraft operated by a resident of Korea in international traffic is exempt. 1040 ez forms 2012 Latvia Income that residents of Latvia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following requirements are met. 1040 ez forms 2012 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise. 1040 ez forms 2012 The exemptions do not apply to directors' fees and similar payments received by a resident of Latvia as a member of the board of directors or similar body of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The exemptions do not apply to income residents of Latvia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040 ez forms 2012 Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if their visit to the United States is wholly or mainly supported by public funds of Latvia, its political subdivisions, or local authorities. 1040 ez forms 2012 Lithuania Income that residents of Lithuania receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following requirements are met. 1040 ez forms 2012 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise. 1040 ez forms 2012 The exemptions do not apply to directors' fees and similar payments received by a resident of Lithuania as a member of the board of directors or similar body of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The exemptions do not apply to income residents of Lithuania receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040 ez forms 2012 Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if their visit to the United States is wholly or mainly supported by public funds of Lithuania, its political subdivisions, or local authorities. 1040 ez forms 2012 Luxembourg Income that residents of Luxembourg receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040 ez forms 2012 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to pay received for employment exercised continuously or predominantly aboard a ship or aircraft operated in international traffic by a U. 1040 ez forms 2012 S. 1040 ez forms 2012 enterprise. 1040 ez forms 2012 The exemptions do not apply to directors' fees and similar payments received by a resident of Luxembourg for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 The exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Luxembourg who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040 ez forms 2012 Malta Income that residents of Malta receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040 ez forms 2012 Under that provision, business profits are exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax unless the individual has a permanent establishment in the United States. 1040 ez forms 2012 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 1040 ez forms 2012 Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet the following requirements. 1040 ez forms 2012 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040 ez forms 2012 Their income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 The exemption does not apply to directors' fees and similar payments received by a resident of Malta for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040 ez forms 2012 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Malta who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax. 1040 ez forms 2012 Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the individual is a member of the regular complement of the ship or aircraft. 1040 ez forms 2012 Mexico Income that residents of Mexico receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 182 days in a 12-month period, and Do not have a fixed base that they regularly use for performing the services. 1040 ez forms 2012 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if the following three requirements are met. 1040 ez forms 2012 The resident is present in the United States for no more than 183 days in a 12-month period. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040 ez forms 2012 The income is not borne by a permanent establishment or fixed base that the employer has in the United States. 1040 ez forms 2012 These exemptions do not apply to directors' fees and similar payments received by a resident of Mexico for services performed outside Mexico as a director or overseer of a company that is a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 These exemptions do not apply to income residents of Mexico receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if the income, including reimbursed expenses, is more than $3,000 during the tax year for their entertainment activities in the United States. 1040 ez forms 2012 This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. 1040 ez forms 2012 Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. 1040 ez forms 2012 Morocco Income that residents of Morocco receive for performing personal services as independent contractors or as self-employed persons (independent personal services) in the United States during the tax year is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents: Are in the United States for no more than 182 days during the tax year, Do not maintain a fixed base in the United States for more than 89 days during the tax year, and Earn total income for those services that is not more than $5,000. 1040 ez forms 2012 If they have a fixed base in the United States for more than 89 days, they are taxed only on the income attributable to the fixed base. 1040 ez forms 2012 Income that residents of Morocco receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the residents meet three requirements. 1040 ez forms 2012 They are in the United States for less than 183 days during the tax year. 1040 ez forms 2012 They are employees of a resident of Morocco or of a permanent establishment of a resident of a country other than Morocco if the permanent establishment is located in Morocco. 1040 ez forms 2012 Their income is not borne by a permanent establishment that the employer has in the United States. 1040 ez forms 2012 Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. 1040 ez forms 2012 Income received by an individual for performing labor or personal services as an employee aboard a ship or an aircraft operated in international traffic by a Moroccan resident is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the individual is a member of the regular complement of the ship or aircraft. 1040 ez forms 2012 These exemptions do not apply to income received for services performed in the United States by professional entertainers, including theater, film, radio, and television performers, musicians, and athletes, unless the services are performed by, or for the account of, a Moroccan nonprofit organization. 1040 ez forms 2012 Netherlands Income that residents of the Netherlands receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. 1040 ez forms 2012 Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. 1040 ez forms 2012 S. 1040 ez forms 2012 income tax if the following three requirements are met. 1040 ez forms 2012 The resident is in the United States for no more than 183 days during the tax year. 1040 ez forms 2012 The income is paid by, or on behalf of, an employer who is not a U. 1040 ez forms 2012 S. 1040 ez forms 2012 resident. 1040 ez forms 2012 The income is not borne by a permanent establishment or fixed base the employer has in the United States. 1040 ez forms 2012 Income received by a Netherlands resident for employment as a member of the regular complement of a ship or
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  • Smishing and Vishing : And Other Cyber Scams to Watch Out For This Holiday
    Smishing - a combination of SMS texting and phishing and Vishing - voice and phishing are two of the scams the FBI's Internet Crime Complaint Center is warning consumers about as we head into the holiday shopping season. These scams are also a reminder that cyber crimes aren't just for computers anymore. Read on for tips to protect yourself From cyber scams.

The 1040 Ez Forms 2012

1040 ez forms 2012 Publication 542 - Main Content Table of Contents Businesses Taxed as CorporationsPersonal services. 1040 ez forms 2012 Employee-owners. 1040 ez forms 2012 Other rules. 1040 ez forms 2012 Other rules. 1040 ez forms 2012 Property Exchanged for StockNonqualified preferred stock. 1040 ez forms 2012 Liabilities. 1040 ez forms 2012 Election to reduce basis. 1040 ez forms 2012 Capital Contributions Filing and Paying Income TaxesIncome Tax Return Penalties Estimated Tax U. 1040 ez forms 2012 S. 1040 ez forms 2012 Real Property Interest Accounting MethodsSection 481(a) adjustment. 1040 ez forms 2012 Accounting Periods Recordkeeping Income, Deductions, and Special ProvisionsCosts of Going Into Business Related Persons Income From Qualifying Shipping Activities Election to Expense Qualified Refinery Property Deduction to Comply With EPA Sulfur Regulations Energy-Efficient Commercial Building Property Deduction Corporate Preference Items Dividends-Received Deduction Extraordinary Dividends Below-Market Loans Charitable Contributions Capital Losses Net Operating Losses At-Risk Limits Passive Activity Limits Figuring TaxTax Rate Schedule Alternative Minimum Tax (AMT) Credits Recapture Taxes Accumulated Earnings Tax Distributions to ShareholdersMoney or Property Distributions Distributions of Stock or Stock Rights Constructive Distributions Reporting Dividends and Other Distributions How To Get Tax Help Businesses Taxed as Corporations The rules you must use to determine whether a business is taxed as a corporation changed for businesses formed after 1996. 1040 ez forms 2012 Business formed before 1997. 1040 ez forms 2012   A business formed before 1997 and taxed as a corporation under the old rules will generally continue to be taxed as a corporation. 1040 ez forms 2012 Business formed after 1996. 1040 ez forms 2012   The following businesses formed after 1996 are taxed as corporations. 1040 ez forms 2012 A business formed under a federal or state law that refers to it as a corporation, body corporate, or body politic. 1040 ez forms 2012 A business formed under a state law that refers to it as a joint-stock company or joint-stock association. 1040 ez forms 2012 An insurance company. 1040 ez forms 2012 Certain banks. 1040 ez forms 2012 A business wholly owned by a state or local government. 1040 ez forms 2012 A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). 1040 ez forms 2012 Certain foreign businesses. 1040 ez forms 2012 Any other business that elects to be taxed as a corporation. 1040 ez forms 2012 For example, a limited liability company (LLC) can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. 1040 ez forms 2012 For more information about LLCs, see Publication 3402, Taxation of Limited Liability Companies. 1040 ez forms 2012 S corporations. 1040 ez forms 2012   Some corporations may meet the qualifications for electing to be S corporations. 1040 ez forms 2012 For information on S corporations, see the instructions for Form 1120S, U. 1040 ez forms 2012 S. 1040 ez forms 2012 Income Tax Return for an S Corporation. 1040 ez forms 2012 Personal service corporations. 1040 ez forms 2012   A corporation is a personal service corporation if it meets all of the following requirements. 1040 ez forms 2012 Its principal activity during the “testing period” is performing personal services (defined later). 1040 ez forms 2012 Generally, the testing period for any tax year is the prior tax year. 1040 ez forms 2012 If the corporation has just been formed, the testing period begins on the first day of its tax year and ends on the earlier of: The last day of its tax year, or The last day of the calendar year in which its tax year begins. 1040 ez forms 2012 Its employee-owners substantially perform the services in (1), above. 1040 ez forms 2012 This requirement is met if more than 20% of the corporation's compensation cost for its activities of performing personal services during the testing period is for personal services performed by employee-owners. 1040 ez forms 2012 Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period. 1040 ez forms 2012 Personal services. 1040 ez forms 2012   Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts. 1040 ez forms 2012 Employee-owners. 1040 ez forms 2012   A person is an employee-owner of a personal service corporation if both of the following apply. 1040 ez forms 2012 He or she is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if he or she is an independent contractor for other purposes) on any day of the testing period. 1040 ez forms 2012 He or she owns any stock in the corporation at any time during the testing period. 1040 ez forms 2012 Other rules. 1040 ez forms 2012   For other rules that apply to personal service corporations see Accounting Periods, later. 1040 ez forms 2012 Closely held corporations. 1040 ez forms 2012   A corporation is closely held if all of the following apply. 1040 ez forms 2012 It is not a personal service corporation. 1040 ez forms 2012 At any time during the last half of the tax year, more than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. 1040 ez forms 2012 “Individual” includes certain trusts and private foundations. 1040 ez forms 2012 Other rules. 1040 ez forms 2012   For the at-risk rules that apply to closely held corporations, seeAt-Risk Limits, later. 1040 ez forms 2012 Property Exchanged for Stock If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other than nonqualified preferred stock, described later), and immediately afterward you are in control of the corporation, the exchange is usually not taxable. 1040 ez forms 2012 This rule applies both to individuals and to groups who transfer property to a corporation. 1040 ez forms 2012 It also applies whether the corporation is being formed or is already operating. 1040 ez forms 2012 It does not apply in the following situations. 1040 ez forms 2012 The corporation is an investment company. 1040 ez forms 2012 You transfer the property in a bankruptcy or similar proceeding in exchange for stock used to pay creditors. 1040 ez forms 2012 The stock is received in exchange for the corporation's debt (other than a security) or for interest on the corporation's debt (including a security) that accrued while you held the debt. 1040 ez forms 2012 Both the corporation and any person involved in a nontaxable exchange of property for stock must attach to their income tax returns a complete statement of all facts pertinent to the exchange. 1040 ez forms 2012 For more information, see section 1. 1040 ez forms 2012 351-3 of the Regulations. 1040 ez forms 2012 Control of a corporation. 1040 ez forms 2012   To be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock. 1040 ez forms 2012 Example 1. 1040 ez forms 2012 You and Bill Jones buy property for $100,000. 1040 ez forms 2012 You both organize a corporation when the property has a fair market value of $300,000. 1040 ez forms 2012 You transfer the property to the corporation for all its authorized capital stock, which has a par value of $300,000. 1040 ez forms 2012 No gain is recognized by you, Bill, or the corporation. 1040 ez forms 2012 Example 2. 1040 ez forms 2012 You and Bill transfer the property with a basis of $100,000 to a corporation in exchange for stock with a fair market value of $300,000. 1040 ez forms 2012 This represents only 75% of each class of stock of the corporation. 1040 ez forms 2012 The other 25% was already issued to someone else. 1040 ez forms 2012 You and Bill recognize a taxable gain of $200,000 on the transaction. 1040 ez forms 2012 Services rendered. 1040 ez forms 2012   The term property does not include services rendered or to be rendered to the issuing corporation. 1040 ez forms 2012 The value of stock received for services is income to the recipient. 1040 ez forms 2012 Example. 1040 ez forms 2012 You transfer property worth $35,000 and render services valued at $3,000 to a corporation in exchange for stock valued at $38,000. 1040 ez forms 2012 Right after the exchange, you own 85% of the outstanding stock. 1040 ez forms 2012 No gain is recognized on the exchange of property. 1040 ez forms 2012 However, you recognize ordinary income of $3,000 as payment for services you rendered to the corporation. 1040 ez forms 2012 Property of relatively small value. 1040 ez forms 2012   The term property does not include property of a relatively small value when it is compared to the value of stock and securities already owned or to be received for services by the transferor if the main purpose of the transfer is to qualify for the nonrecognition of gain or loss by other transferors. 1040 ez forms 2012   Property transferred will not be considered to be of relatively small value if its fair market value is at least 10% of the fair market value of the stock and securities already owned or to be received for services by the transferor. 1040 ez forms 2012 Stock received in disproportion to property transferred. 1040 ez forms 2012   If a group of transferors exchange property for corporate stock, each transferor does not have to receive stock in proportion to his or her interest in the property transferred. 1040 ez forms 2012 If a disproportionate transfer takes place, it will be treated for tax purposes in accordance with its true nature. 1040 ez forms 2012 It may be treated as if the stock were first received in proportion and then some of it used to make gifts, pay compensation for services, or satisfy the transferor's obligations. 1040 ez forms 2012 Money or other property received. 1040 ez forms 2012   If, in an otherwise nontaxable exchange of property for corporate stock, you also receive money or property other than stock, you may have to recognize gain. 1040 ez forms 2012 You must recognize gain only up to the amount of money plus the fair market value of the other property you receive. 1040 ez forms 2012 The rules for figuring the recognized gain in this situation generally follow those for a partially nontaxable exchange discussed in Publication 544 under Like-Kind Exchanges. 1040 ez forms 2012 If the property you give up includes depreciable property, the recognized gain may have to be reported as ordinary income from depreciation. 1040 ez forms 2012 See chapter 3 of Publication 544. 1040 ez forms 2012 No loss is recognized. 1040 ez forms 2012 Nonqualified preferred stock. 1040 ez forms 2012   Nonqualified preferred stock is treated as property other than stock. 1040 ez forms 2012 Generally, it is preferred stock with any of the following features. 1040 ez forms 2012 The holder has the right to require the issuer or a related person to redeem or buy the stock. 1040 ez forms 2012 The issuer or a related person is required to redeem or buy the stock. 1040 ez forms 2012 The issuer or a related person has the right to redeem or buy the stock and, on the issue date, it is more likely than not that the right will be exercised. 1040 ez forms 2012 The dividend rate on the stock varies with reference to interest rates, commodity prices, or similar indices. 1040 ez forms 2012 For a detailed definition of nonqualified preferred stock, see section 351(g)(2) of the Internal Revenue Code. 1040 ez forms 2012 Liabilities. 1040 ez forms 2012   If the corporation assumes your liabilities, the exchange generally is not treated as if you received money or other property. 1040 ez forms 2012 There are two exceptions to this treatment. 1040 ez forms 2012 If the liabilities the corporation assumes are more than your adjusted basis in the property you transfer, gain is recognized up to the difference. 1040 ez forms 2012 However, if the liabilities assumed give rise to a deduction when paid, such as a trade account payable or interest, no gain is recognized. 1040 ez forms 2012 If there is no good business reason for the corporation to assume your liabilities, or if your main purpose in the exchange is to avoid federal income tax, the assumption is treated as if you received money in the amount of the liabilities. 1040 ez forms 2012 For more information on the assumption of liabilities, see section 357(d) of the Internal Revenue Code. 1040 ez forms 2012 Example. 1040 ez forms 2012 You transfer property to a corporation for stock. 1040 ez forms 2012 Immediately after the transfer, you control the corporation. 1040 ez forms 2012 You also receive $10,000 in the exchange. 1040 ez forms 2012 Your adjusted basis in the transferred property is $20,000. 1040 ez forms 2012 The stock you receive has a fair market value (FMV) of $16,000. 1040 ez forms 2012 The corporation also assumes a $5,000 mortgage on the property for which you are personally liable. 1040 ez forms 2012 Gain is realized as follows. 1040 ez forms 2012 FMV of stock received $16,000 Cash received 10,000 Liability assumed by corporation 5,000 Total received $31,000 Minus: Adjusted basis of property transferred 20,000 Realized gain $11,000   The liability assumed is not treated as money or other property. 1040 ez forms 2012 The recognized gain is limited to $10,000, the cash received. 1040 ez forms 2012 Loss on exchange. 1040 ez forms 2012   If you have a loss from an exchange and own, directly or indirectly, more than 50% of the corporation's stock, you cannot deduct the loss. 1040 ez forms 2012 For more information, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. 1040 ez forms 2012 Basis of stock or other property received. 1040 ez forms 2012   The basis of the stock you receive is generally the adjusted basis of the property you transfer. 1040 ez forms 2012 Increase this amount by any amount treated as a dividend, plus any gain recognized on the exchange. 1040 ez forms 2012 Decrease this amount by any cash you received, the fair market value of any other property you received, and any loss recognized on the exchange. 1040 ez forms 2012 Also decrease this amount by the amount of any liability the corporation or another party to the exchange assumed from you, unless payment of the liability gives rise to a deduction when paid. 1040 ez forms 2012    Further decreases may be required when the corporation or another party to the exchange assumes from you a liability that gives rise to a deduction when paid, if the basis of the stock would otherwise be higher than its fair market value on the date of the exchange. 1040 ez forms 2012 This rule does not apply if the entity assuming the liability acquired either substantially all of the assets or the trade or business with which the liability is associated. 1040 ez forms 2012 The basis of any other property you receive is its fair market value on the date of the trade. 1040 ez forms 2012 Basis of property transferred. 1040 ez forms 2012   A corporation that receives property from you in exchange for its stock generally has the same basis you had in the property, increased by any gain you recognized on the exchange. 1040 ez forms 2012 However, the increase for the gain recognized may be limited. 1040 ez forms 2012 For more information, see section 362 of the Internal Revenue Code. 1040 ez forms 2012 Election to reduce basis. 1040 ez forms 2012   In a section 351 transaction, if the adjusted basis of the property transferred exceeds the property's fair market value, the transferor and transferee may make an irrevocable election to treat the basis of the stock received by the transferor as having a basis equal to the fair market value of the property transferred. 1040 ez forms 2012 The transferor and transferee make this election by attaching a statement to their tax returns filed by the due date (including extensions) for the tax year in which the transaction occurred. 1040 ez forms 2012 However, if the transferor makes the election by including the certification provided in Notice 2005-70, 2005-41, I. 1040 ez forms 2012 R. 1040 ez forms 2012 B. 1040 ez forms 2012 694, on or with its tax return filed by the due date (including extensions), then no election need be made by the transferee. 1040 ez forms 2012    For more information on making this election, see section 362(e)(2)(C) of the Internal Revenue Code, and Notice 2005-70. 1040 ez forms 2012 Capital Contributions This section explains the tax treatment of contributions from shareholders and nonshareholders. 1040 ez forms 2012 Paid-in capital. 1040 ez forms 2012   Contributions to the capital of a corporation, whether or not by shareholders, are paid-in capital. 1040 ez forms 2012 These contributions are not taxable to the corporation. 1040 ez forms 2012 Basis. 1040 ez forms 2012   The corporation's basis of property contributed to capital by a shareholder is the same as the basis the shareholder had in the property, increased by any gain the shareholder recognized on the exchange. 1040 ez forms 2012 However, the increase for the gain recognized may be limited. 1040 ez forms 2012 For more information, see Basis of property transferred, above, and section 362 of the Internal Revenue Code. 1040 ez forms 2012   The basis of property contributed to capital by a person other than a shareholder is zero. 1040 ez forms 2012   If a corporation receives a cash contribution from a person other than a shareholder, the corporation must reduce the basis of any property acquired with the contribution during the 12-month period beginning on the day it received the contribution by the amount of the contribution. 1040 ez forms 2012 If the amount contributed is more than the cost of the property acquired, then reduce, but not below zero, the basis of the other properties held by the corporation on the last day of the 12-month period in the following order. 1040 ez forms 2012 Depreciable property. 1040 ez forms 2012 Amortizable property. 1040 ez forms 2012 Property subject to cost depletion but not to percentage depletion. 1040 ez forms 2012 All other remaining properties. 1040 ez forms 2012   Reduce the basis of property in each category to zero before going on to the next category. 1040 ez forms 2012   There may be more than one piece of property in each category. 1040 ez forms 2012 Base the reduction of the basis of each property on the following ratio:   Basis of each piece of property   Bases of all properties (within that category) If the corporation wishes to make this adjustment in some other way, it must get IRS approval. 1040 ez forms 2012 The corporation files a request for approval with its income tax return for the tax year in which it receives the contribution. 1040 ez forms 2012 Filing and Paying Income Taxes The federal income tax is a pay-as-you-go tax. 1040 ez forms 2012 A corporation generally must make estimated tax payments as it earns or receives income during its tax year. 1040 ez forms 2012 After the end of the year, the corporation must file an income tax return. 1040 ez forms 2012 This section will help you determine when and how to pay and file corporate income taxes. 1040 ez forms 2012 For certain corporations affected by Presidentially declared disasters such as hurricanes, the due dates for filing returns, paying taxes, and performing other time-sensitive acts may be extended. 1040 ez forms 2012 The IRS may also forgive the interest and penalties on any underpaid tax for the length of any extension. 1040 ez forms 2012 For more information, visit www. 1040 ez forms 2012 irs. 1040 ez forms 2012 gov/newsroom/article/0,,id=108362. 1040 ez forms 2012 00. 1040 ez forms 2012 Income Tax Return This section will help you determine when and how to report a corporation's income tax. 1040 ez forms 2012 Who must file. 1040 ez forms 2012   Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. 1040 ez forms 2012 Which form to file. 1040 ez forms 2012   A corporation generally must file Form 1120, U. 1040 ez forms 2012 S. 1040 ez forms 2012 Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. 1040 ez forms 2012 Certain organizations and entities must file special returns. 1040 ez forms 2012 For more information, see Special Returns for Certain Organizations, in the Instructions for Form 1120. 1040 ez forms 2012 Electronic filing. 1040 ez forms 2012   Corporations can generally electronically file (e-file) Form 1120 and certain related forms, schedules, and attachments. 1040 ez forms 2012 Certain corporations with total assets of $10 million or more, that file at least 250 returns a year must e-file Form 1120. 1040 ez forms 2012 However, in certain instances, these corporations can request a waiver. 1040 ez forms 2012 For more information regarding electronic filing, visit www. 1040 ez forms 2012 irs. 1040 ez forms 2012 gov/efile. 1040 ez forms 2012 When to file. 1040 ez forms 2012   Generally, a corporation must file its income tax return by the 15th day of the 3rd month after the end of its tax year. 1040 ez forms 2012 A new corporation filing a short-period return must generally file by the 15th day of the 3rd month after the short period ends. 1040 ez forms 2012 A corporation that has dissolved must generally file by the 15th day of the 3rd month after the date it dissolved. 1040 ez forms 2012 Example 1. 1040 ez forms 2012 A corporation's tax year ends December 31. 1040 ez forms 2012 It must file its income tax return by March 15th. 1040 ez forms 2012 Example 2. 1040 ez forms 2012 A corporation's tax year ends June 30. 1040 ez forms 2012 It must file its income tax return by September 15th. 1040 ez forms 2012   If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. 1040 ez forms 2012 Extension of time to file. 1040 ez forms 2012   File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, to request an extension of time to file a corporation income tax return. 1040 ez forms 2012 The IRS will grant the extension if you complete the form properly, file it, and pay any tax due by the original due date for the return. 1040 ez forms 2012   Form 7004 does not extend the time for paying the tax due on the return. 1040 ez forms 2012 Interest, and possibly penalties, will be charged on any part of the final tax due not shown as a balance due on Form 7004. 1040 ez forms 2012 The interest is figured from the original due date of the return to the date of payment. 1040 ez forms 2012   For more information, see the instructions for Form 7004. 1040 ez forms 2012 How to pay your taxes. 1040 ez forms 2012   A corporation must pay its tax due in full no later than the 15th day of the 3rd month after the end of its tax year. 1040 ez forms 2012 Electronic Federal Tax Payment System (EFTPS). 1040 ez forms 2012   Corporations generally must use EFTPS to make deposits of all tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes). 1040 ez forms 2012 For more information on EFTPS and enrollment, visit www. 1040 ez forms 2012 eftps. 1040 ez forms 2012 gov or call 1-800-555-4477. 1040 ez forms 2012 Also see Publication 966, The Secure Way to Pay Your Federal Taxes. 1040 ez forms 2012 Note. 1040 ez forms 2012 Forms 8109 and 8109-B, Federal Tax Deposit Coupon, can no longer be used to make federal tax deposits. 1040 ez forms 2012 Penalties Generally, if the corporation receives a notice about interest and penalties after it files its return, send the IRS an explanation and we will determine if the corporation meets reasonable-cause criteria. 1040 ez forms 2012 Do not attach an explanation when the corporation's return is filed. 1040 ez forms 2012 See the instructions for your income tax return. 1040 ez forms 2012 Late filing of return. 1040 ez forms 2012    A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. 1040 ez forms 2012 If the corporation is charged a penalty for late payment of tax (discussed next) for the same period of time, the penalty for late filing is reduced by the amount of the penalty for late payment. 1040 ez forms 2012 The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $100. 1040 ez forms 2012 The penalty will not be imposed if the corporation can show the failure to file on time was due to a reasonable cause. 1040 ez forms 2012 Late payment of tax. 1040 ez forms 2012    A corporation that does not pay the tax when due may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. 1040 ez forms 2012 The penalty will not be imposed if the corporation can show that the failure to pay on time was due to a reasonable cause. 1040 ez forms 2012 Trust fund recovery penalty. 1040 ez forms 2012   If income, social security, and Medicare taxes that a corporation must withhold from employee wages are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. 1040 ez forms 2012 The penalty is the full amount of the unpaid trust fund tax. 1040 ez forms 2012 This penalty may apply to you if these unpaid taxes cannot be immediately collected from the business. 1040 ez forms 2012   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying these taxes, and who acted willfully in not doing so. 1040 ez forms 2012   A responsible person can be an officer or employee of a corporation, an accountant, or a volunteer director/trustee. 1040 ez forms 2012 A responsible person also may include one who signs checks for the corporation or otherwise has authority to cause the spending of business funds. 1040 ez forms 2012   Willfully means voluntarily, consciously, and intentionally. 1040 ez forms 2012 A responsible person acts willfully if the person knows the required actions are not taking place. 1040 ez forms 2012   For more information on withholding and paying these taxes, see Publication 15 (Circular E), Employer's Tax Guide, and Publication 51, (Circular A), Agricultural Employer's Tax Guide. 1040 ez forms 2012 Other penalties. 1040 ez forms 2012   Other penalties can be imposed for negligence, substantial understatement of tax, reportable transaction understatements, and fraud. 1040 ez forms 2012 See sections 6662, 6662A, and 6663 of the Internal Revenue Code. 1040 ez forms 2012 Estimated Tax Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more. 1040 ez forms 2012 If the corporation does not pay the installments when they are due, it could be subject to an underpayment penalty. 1040 ez forms 2012 This section will explain how to avoid this penalty. 1040 ez forms 2012 When to pay estimated tax. 1040 ez forms 2012   Installment payments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. 1040 ez forms 2012 Example 1. 1040 ez forms 2012 Your corporation's tax year ends December 31. 1040 ez forms 2012 Installment payments are due on April 15, June 15, September 15, and December 15. 1040 ez forms 2012 Example 2. 1040 ez forms 2012 Your corporation's tax year ends June 30. 1040 ez forms 2012 Installment payments are due on October 15, December 15, March 15, and June 15. 1040 ez forms 2012   If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day. 1040 ez forms 2012 How to figure each required installment. 1040 ez forms 2012   Use Form 1120-W, Estimated Tax for Corporations, as a worksheet to figure each required installment of estimated tax. 1040 ez forms 2012 You will generally use one of the following two methods to figure each required installment. 1040 ez forms 2012 You should use the method that yields the smallest installment payments. 1040 ez forms 2012 Note. 1040 ez forms 2012 In these discussions, “return” generally refers to the corporation's original return. 1040 ez forms 2012 However, an amended return is considered the original return if it is filed by the due date (including extensions) of the original return. 1040 ez forms 2012 Method 1. 1040 ez forms 2012   Each required installment is 25% of the income tax the corporation will show on its return for the current year. 1040 ez forms 2012 Method 2. 1040 ez forms 2012   Each required installment is 25% of the income tax shown on the corporation's return for the previous year. 1040 ez forms 2012   To use Method 2: The corporation must have filed a return for the previous year, The return must have been for a full 12 months, and The return must have shown a positive tax liability (not zero). 1040 ez forms 2012 Also, if the corporation is a large corporation, it can use Method 2 to figure the first installment only. 1040 ez forms 2012   See the Instructions for Form 1120-W, for the definition of a large corporation and other special rules for large corporations. 1040 ez forms 2012 Other methods. 1040 ez forms 2012   If a corporation's income is expected to vary during the year because, for example, its business is seasonal, it may be able to lower the amount of one or more required installments by using one or both of the following methods. 1040 ez forms 2012 The annualized income installment method. 1040 ez forms 2012 The adjusted seasonal installment method. 1040 ez forms 2012 Use Schedule A of Form 1120-W to determine if using one or both of these methods will lower the amount of any required installments. 1040 ez forms 2012 Refiguring required installments. 1040 ez forms 2012   If after the corporation figures and deposits its estimated tax it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments to see if an underpayment penalty may apply. 1040 ez forms 2012 An immediate catchup payment should be made to reduce any penalty resulting from the underpayment of any earlier installments. 1040 ez forms 2012 Underpayment penalty. 1040 ez forms 2012   If the corporation does not pay a required installment of estimated tax by its due date, it may be subject to a penalty. 1040 ez forms 2012 The penalty is figured separately for each installment due date. 1040 ez forms 2012 The corporation may owe a penalty for an earlier due date, even if it paid enough tax later to make up the underpayment. 1040 ez forms 2012 This is true even if the corporation is due a refund when its return is filed. 1040 ez forms 2012 Form 2220. 1040 ez forms 2012   Use Form 2220, Underpayment of Estimated Tax by Corporations, to determine if a corporation is subject to the penalty for underpayment of estimated tax and to figure the amount of the penalty. 1040 ez forms 2012   If the corporation is charged a penalty, the amount of the penalty depends on the following three factors. 1040 ez forms 2012 The amount of the underpayment. 1040 ez forms 2012 The period during which the underpayment was due and unpaid. 1040 ez forms 2012 The interest rate for underpayments published quarterly by the IRS in the Internal Revenue Bulletin. 1040 ez forms 2012   A corporation generally does not have to file Form 2220 with its income tax return because the IRS will figure any penalty and bill the corporation. 1040 ez forms 2012 However, even if the corporation does not owe a penalty, complete and attach the form to the corporation's tax return if any of the following apply. 1040 ez forms 2012 The annualized income installment method was used to figure any required installment. 1040 ez forms 2012 The adjusted seasonal installment method was used to figure any required installment. 1040 ez forms 2012 The corporation is a large corporation figuring its first required installment based on the prior year's tax. 1040 ez forms 2012 How to pay estimated tax. 1040 ez forms 2012   A corporation is generally required to use EFTPS to pay its taxes. 1040 ez forms 2012 See Electronic Federal Tax Payment System (EFTPS), earlier. 1040 ez forms 2012 Also see the Instructions for Form 1120-W. 1040 ez forms 2012 Quick refund of overpayments. 1040 ez forms 2012   A corporation that has overpaid its estimated tax for the tax year may be able to apply for a quick refund. 1040 ez forms 2012 Use Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, to apply for a quick refund of an overpayment of estimated tax. 1040 ez forms 2012 A corporation can apply for a quick refund if the overpayment is: At least 10% of its expected tax liability, and At least $500. 1040 ez forms 2012 Use Form 4466 to figure the corporation's expected tax liability and the overpayment of estimated tax. 1040 ez forms 2012 File Form 4466 before the 16th day of the 3rd month after the end of the tax year, but before the corporation files its income tax return. 1040 ez forms 2012 Do not file Form 4466 before the end of the corporation's tax year. 1040 ez forms 2012 An extension of time to file the corporation's income tax return will not extend the time for filing Form 4466. 1040 ez forms 2012 The IRS will act on the form within 45 days from the date you file it. 1040 ez forms 2012 U. 1040 ez forms 2012 S. 1040 ez forms 2012 Real Property Interest If a domestic corporation acquires a U. 1040 ez forms 2012 S. 1040 ez forms 2012 real property interest from a foreign person or firm, the corporation may have to withhold tax on the amount it pays for the property. 1040 ez forms 2012 The amount paid includes cash, the fair market value of other property, and any assumed liability. 1040 ez forms 2012 If a domestic corporation distributes a U. 1040 ez forms 2012 S. 1040 ez forms 2012 real property interest to a foreign person or firm, it may have to withhold tax on the fair market value of the property. 1040 ez forms 2012 A corporation that fails to withhold may be liable for the tax, and any penalties and interest that apply. 1040 ez forms 2012 For more information, see section 1445 of the Internal Revenue Code; Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities; Form 8288, U. 1040 ez forms 2012 S. 1040 ez forms 2012 Withholding Tax Return for Dispositions by Foreign Persons of U. 1040 ez forms 2012 S. 1040 ez forms 2012 Real Property Interests; and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. 1040 ez forms 2012 S. 1040 ez forms 2012 Real Property Interests. 1040 ez forms 2012 Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. 1040 ez forms 2012 Taxable income should be determined using the method of accounting regularly used in keeping the corporation's books and records. 1040 ez forms 2012 In all cases, the method used must clearly show taxable income. 1040 ez forms 2012 Generally, permissible methods include: Cash, Accrual, or Any other method authorized by the Internal Revenue Code. 1040 ez forms 2012 Accrual method. 1040 ez forms 2012   Generally, a corporation (other than a qualified personal service corporation) must use the accrual method of accounting if its average annual gross receipts exceed $5 million. 1040 ez forms 2012 A corporation engaged in farming operations also must use the accrual method. 1040 ez forms 2012   If inventories are required, the accrual method generally must be used for sales and purchases of merchandise. 1040 ez forms 2012 However, qualifying taxpayers and eligible businesses of qualifying small business taxpayers are excepted from using the accrual method for eligible trades or businesses and may account for inventoriable items as materials and supplies that are not incidental. 1040 ez forms 2012   Under the accrual method, an amount is includable in income when: All the events have occurred that fix the right to receive the income, which is the earliest of the date: The required performance takes place, Payment is due, or Payment is received; and The amount can be determined with reasonable accuracy. 1040 ez forms 2012   Generally, an accrual basis taxpayer can deduct accrued expenses in the tax year when: All events that determine the liability have occurred, The amount of the liability can be figured with reasonable accuracy, and Economic performance takes place with respect to the expense. 1040 ez forms 2012   There are exceptions to the economic performance rule for certain items, including recurring expenses. 1040 ez forms 2012 See section 461(h) of the Internal Revenue Code and the related regulations for the rules for determining when economic performance takes place. 1040 ez forms 2012 Nonaccrual experience method. 1040 ez forms 2012   Accrual method corporations are not required to maintain accruals for certain amounts from the performance of services that, on the basis of their experience, will not be collected, if: The services are in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting; or The corporation's average annual gross receipts for the 3 prior tax years does not exceed $5 million. 1040 ez forms 2012   This provision does not apply if interest is required to be paid on the amount or if there is any penalty for failure to pay the amount timely. 1040 ez forms 2012 Percentage of completion method. 1040 ez forms 2012   Long-term contracts (except for certain real property construction contracts) must generally be accounted for using the percentage of completion method described in section 460 of the Internal Revenue Code. 1040 ez forms 2012 Mark-to-market accounting method. 1040 ez forms 2012   Generally, dealers in securities must use the mark-to-market accounting method described in section 475 of the Internal Revenue Code. 1040 ez forms 2012 Under this method any security held by a dealer as inventory must be included in inventory at its FMV. 1040 ez forms 2012 Any security not held as inventory at the close of the tax year is treated as sold at its FMV on the last business day of the tax year. 1040 ez forms 2012 Any gain or loss must be taken into account in determining gross income. 1040 ez forms 2012 The gain or loss taken into account is treated as ordinary gain or loss. 1040 ez forms 2012   Dealers in commodities and traders in securities and commodities can elect to use the mark-to-market accounting method. 1040 ez forms 2012 Change in accounting method. 1040 ez forms 2012   A corporation can change its method of accounting used to report taxable income (for income as a whole or for the treatment of any material item). 1040 ez forms 2012 The corporation must file Form 3115, Application for Change in Accounting Method. 1040 ez forms 2012 For more information, see Form 3115 and Publication 538. 1040 ez forms 2012 Section 481(a) adjustment. 1040 ez forms 2012   The corporation may have to make an adjustment under section 481(a) of the Internal Revenue Code to prevent amounts of income or expense from being duplicated or omitted. 1040 ez forms 2012 The section 481(a) adjustment period is generally 1 year for a net negative adjustment and 4 years for a net positive adjustment. 1040 ez forms 2012 However, a corporation can elect to use a 1-year adjustment period if the net section 481(a) adjustment for the change is less than $25,000. 1040 ez forms 2012 The corporation must complete the appropriate lines of Form 3115 to make the election. 1040 ez forms 2012 See the Instructions for Form 3115. 1040 ez forms 2012 Accounting Periods A corporation must figure its taxable income on the basis of a tax year. 1040 ez forms 2012 A tax year is the annual accounting period a corporation uses to keep its records and report its income and expenses. 1040 ez forms 2012 Generally, corporations can use either a calendar year or a fiscal year as its tax year. 1040 ez forms 2012 Unless special rules apply, a corporation generally adopts a tax year by filing its first federal income tax return using that tax year. 1040 ez forms 2012 For more information, see Publication 538. 1040 ez forms 2012 Personal service corporation. 1040 ez forms 2012   A personal service corporation must use a calendar year as its tax year unless: It elects to use a 52–53 week tax year that ends with reference to the calendar year; It can establish a business purpose for a different tax year and obtains approval of the IRS. 1040 ez forms 2012 See Form 1128, Application To Adopt, Change, or Retain a Tax Year, and Publication 538; or It elects under section 444 of the Internal Revenue Code to have a tax year other than a calendar year. 1040 ez forms 2012 Use Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, to make the election. 1040 ez forms 2012   If a personal service corporation makes a section 444 election, its deduction for certain amounts paid to employee-owners may be limited. 1040 ez forms 2012 See Schedule H (Form 1120), Section 280H Limitations for a Personal Service Corporation (PSC), to figure the maximum deduction. 1040 ez forms 2012 Change of tax year. 1040 ez forms 2012   Generally, a corporation must get the consent of the IRS before changing its tax year by filing Form 1128. 1040 ez forms 2012 However, under certain conditions, a corporation can change its tax year without getting the consent. 1040 ez forms 2012 For more information, see Form 1128 and Publication 538. 1040 ez forms 2012 Recordkeeping A corporation should keep its records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. 1040 ez forms 2012 Usually records that support items of income, deductions, or credits on the return must be kept for 3 years from the date the return is due or filed, whichever is later. 1040 ez forms 2012 Keep records that verify the corporation's basis in property for as long as they are needed to figure the basis of the original or replacement property. 1040 ez forms 2012 The corporation should keep copies of all filed returns. 1040 ez forms 2012 They help in preparing future and amended returns and in the calculation of earnings and profits. 1040 ez forms 2012 Income, Deductions, and Special Provisions Rules on income and deductions that apply to individuals also apply, for the most part, to corporations. 1040 ez forms 2012 However, the following special provisions apply only to corporations. 1040 ez forms 2012 Costs of Going Into Business When you go into business, treat all costs you incur to get your business started as capital expenses. 1040 ez forms 2012 However, a corporation can elect to deduct a limited amount of start-up or organizational costs. 1040 ez forms 2012 Any costs not deducted can be amortized. 1040 ez forms 2012 Start-up costs are costs for creating an active trade or business or investigating the creation or acquisition of an active trade or business. 1040 ez forms 2012 Organizational costs are the direct costs of creating the corporation. 1040 ez forms 2012 For more information on deducting or amortizing start-up and organizational costs, see the instructions for your income tax return. 1040 ez forms 2012 Also see, Publication 535, chapter 7, Costs You Can Deduct or Capitalize, and chapter 8, Amortization. 1040 ez forms 2012 Related Persons A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income. 1040 ez forms 2012 Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. 1040 ez forms 2012 If a deduction is denied, the rule will continue to apply even if the corporation's relationship with the person ends before the expense or interest is includible in the gross income of that person. 1040 ez forms 2012 These rules also deny the deduction of losses on the sale or exchange of property between related persons. 1040 ez forms 2012 Related persons. 1040 ez forms 2012   For purposes of this rule, the following persons are related to a corporation. 1040 ez forms 2012 Another corporation, that is a member of the same controlled group (as defined in section 267(f) of the Internal Revenue Code). 1040 ez forms 2012 An individual who owns, directly or indirectly, more than 50% of the value of the outstanding stock of the corporation. 1040 ez forms 2012 A trust fiduciary, when the trust or the grantor of the trust owns, directly or indirectly, more than 50% in value of the outstanding stock of the corporation. 1040 ez forms 2012 An S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. 1040 ez forms 2012 A partnership, if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital or profits interest in the partnership. 1040 ez forms 2012 Any employee-owner, if the corporation is a personal service corporation (see Personal service corporation, earlier), regardless of the amount of stock owned by the employee-owner. 1040 ez forms 2012 Ownership of stock. 1040 ez forms 2012   To determine whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following apply. 1040 ez forms 2012 Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, is treated as being owned proportionately by or for its shareholders, partners, or beneficiaries. 1040 ez forms 2012 An individual is treated as owning the stock owned, directly or indirectly, by or for the individual's family. 1040 ez forms 2012 Family includes only brothers and sisters (including half brothers and half sisters), a spouse, ancestors, and lineal descendants. 1040 ez forms 2012 Any individual owning (other than by applying (2), above) stock in a corporation, is treated as also owning the stock owned directly or indirectly by that individual's partner. 1040 ez forms 2012 To apply (1), (2), or (3), above, stock constructively owned by a person under (1) is treated as actually owned by that person. 1040 ez forms 2012 But stock constructively owned by an individual under (2) or (3) is not treated as actually owned by the individual for applying either (2) or (3) to make another person the constructive owner of that stock. 1040 ez forms 2012 Reallocation of income and deductions. 1040 ez forms 2012   Where it is necessary to clearly show income or prevent tax evasion, the IRS can reallocate gross income, deductions, credits, or allowances between two or more organizations, trades, or businesses owned or controlled directly, or indirectly, by the same interests. 1040 ez forms 2012 Complete liquidations. 1040 ez forms 2012   The disallowance of losses from the sale or exchange of property between related persons does not apply to liquidating distributions. 1040 ez forms 2012 More information. 1040 ez forms 2012   For more information about the related person rules, see Publication 544. 1040 ez forms 2012 Income From Qualifying Shipping Activities A corporation may make an election to be taxed on its notional shipping income at the highest corporate tax rate. 1040 ez forms 2012 If a corporation makes this election it may exclude income from qualifying shipping activities from gross income. 1040 ez forms 2012 Also if the election is made, the corporation generally may not claim any loss, deduction, or credit with respect to qualifying shipping activities. 1040 ez forms 2012 A corporation making this election may also elect to defer gain on the disposition of a qualifying vessel. 1040 ez forms 2012 A corporation uses Form 8902, Alternative Tax on Qualifying Shipping Activities, to make the election and figure the alternative tax. 1040 ez forms 2012 For more information regarding the election, see Form 8902. 1040 ez forms 2012 Election to Expense Qualified Refinery Property A corporation can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct 50% of the cost of qualified refinery property (defined in section 179C(c) of the Internal Revenue Code), placed in service before January 1, 2014. 1040 ez forms 2012 The deduction is allowed for the year in which the property is placed in service. 1040 ez forms 2012 A subchapter T cooperative can make an irrevocable election on its return by the due date (including extensions) to allocate this deduction to its owners based on their ownership interest. 1040 ez forms 2012 For more information, see section 179C of the Internal Revenue Code and the related Regulations. 1040 ez forms 2012 Deduction to Comply With EPA Sulfur Regulations A small business refiner can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct up to 75% of qualified costs paid or incurred to comply with the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection Agency (EPA). 1040 ez forms 2012 A subchapter T cooperative can make an irrevocable election on its return filed by the due date (including extensions) to allocate the deduction to its owners based on their ownership interest. 1040 ez forms 2012 For more information, see sections 45H and 179B of the Internal Revenue Code and the related Regulations. 1040 ez forms 2012 Energy-Efficient Commercial Building Property Deduction A corporation can claim a deduction for costs associated with energy-efficient commercial building property, placed in service before January 1, 2014. 1040 ez forms 2012 In order to qualify for the deduction: The costs must be associated with depreciable or amortizable property in a Standard 90. 1040 ez forms 2012 1-2001 domestic building; The property must be either a part of the interior lighting system, the heating, cooling, ventilation and hot water system, or the building envelope (defined in section 179D(c)(1)(C) of the Internal Revenue Code); and The property must be installed as part of a plan to reduce the total annual energy and power costs of the building by 50% or more. 1040 ez forms 2012 The deduction is limited to $1. 1040 ez forms 2012 80 per square foot of the building less the total amount of deductions taken for this property in prior tax years. 1040 ez forms 2012 Other rules and limitations apply. 1040 ez forms 2012 The corporation must reduce the basis of any property by any deduction taken. 1040 ez forms 2012 The deduction is subject to recapture if the corporation fails to fully implement an energy savings plan. 1040 ez forms 2012 For more information, see section 179D of the Internal Revenue Code. 1040 ez forms 2012 Also see Notice 2006-52, 2006-26 I. 1040 ez forms 2012 R. 1040 ez forms 2012 B. 1040 ez forms 2012 1175, clarified and amplified by Notice 2008-40, 2008-14 I. 1040 ez forms 2012 R. 1040 ez forms 2012 B. 1040 ez forms 2012 725, and any successor. 1040 ez forms 2012 Corporate Preference Items A corporation must make special adjustments to certain items before it takes them into account in determining its taxable income. 1040 ez forms 2012 These items are known as corporate preference items and they include the following. 1040 ez forms 2012 Gain on the disposition of section 1250 property. 1040 ez forms 2012 For more information, see section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. 1040 ez forms 2012 Percentage depletion for iron ore and coal (including lignite). 1040 ez forms 2012 For more information, see Mines and Geothermal Deposits under Mineral Property in chapter 9 of Publication 535. 1040 ez forms 2012 Amortization of pollution control facilities. 1040 ez forms 2012 For more information, see Pollution Control Facilities in chapter 8 of Publication 535 and section 291(a)(5) of the Internal Revenue Code. 1040 ez forms 2012 Mineral exploration and development costs. 1040 ez forms 2012 For more information, see Exploration Costs and Development Costs in chapter 7 of Publication 535. 1040 ez forms 2012 For more information on corporate preference items, see section 291 of the Internal Revenue Code. 1040 ez forms 2012 Dividends-Received Deduction A corporation can deduct a percentage of certain dividends received during its tax year. 1040 ez forms 2012 This section discusses the general rules that apply. 1040 ez forms 2012 The deduction is figured on Form 1120, Schedule C, or the applicable schedule of your income tax return. 1040 ez forms 2012 For more information, see the Instructions for Form 1120, or the instructions for your applicable income tax return. 1040 ez forms 2012 Dividends from domestic corporations. 1040 ez forms 2012   A corporation can deduct, within certain limits, 70% of the dividends received if the corporation receiving the dividend owns less than 20% of the corporation distributing the dividend. 1040 ez forms 2012 If the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 80% of the dividends received. 1040 ez forms 2012 Ownership. 1040 ez forms 2012   Determine ownership, for these rules, by the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) the receiving corporation owns. 1040 ez forms 2012 Small business investment companies. 1040 ez forms 2012   Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations. 1040 ez forms 2012 Dividends from regulated investment companies. 1040 ez forms 2012   Regulated investment company dividends received are subject to certain limits. 1040 ez forms 2012 Capital gain dividends received from a regulated investment company do not qualify for the deduction. 1040 ez forms 2012 For more information, see section 854 of the Internal Revenue Code. 1040 ez forms 2012 No deduction allowed for certain dividends. 1040 ez forms 2012   Corporations cannot take a deduction for dividends received from the following entities. 1040 ez forms 2012 A real estate investment trust (REIT). 1040 ez forms 2012 A corporation exempt from tax under section 501 or 521 of the Internal Revenue Code either for the tax year of the distribution or the preceding tax year. 1040 ez forms 2012 A corporation whose stock was held less than 46 days during the 91-day period beginning 45 days before the stock became ex-dividend with respect to the dividend. 1040 ez forms 2012 Ex-dividend means the holder has no rights to the dividend. 1040 ez forms 2012 A corporation whose preferred stock was held less than 91 days during the 181-day period beginning 90 days before the stock became ex-dividend with respect to the dividend if the dividends received are for a period or periods totaling more than 366 days. 1040 ez forms 2012 Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. 1040 ez forms 2012 Dividends on deposits. 1040 ez forms 2012   Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. 1040 ez forms 2012 They do not qualify for this deduction. 1040 ez forms 2012 Limit on deduction for dividends. 1040 ez forms 2012   The total deduction for dividends received or accrued is generally limited (in the following order) to: 80% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from 20%-owned corporations, then 70% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations). 1040 ez forms 2012 Figuring the limit. 1040 ez forms 2012   In figuring the limit, determine taxable income without the following items. 1040 ez forms 2012 The net operating loss deduction. 1040 ez forms 2012 The domestic production activities deduction. 1040 ez forms 2012 The deduction for dividends received. 1040 ez forms 2012 Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, below). 1040 ez forms 2012 Any capital loss carryback to the tax year. 1040 ez forms 2012 Effect of net operating loss. 1040 ez forms 2012   If a corporation has a net operating loss (NOL) for a tax year, the limit of 80% (or 70%) of taxable income does not apply. 1040 ez forms 2012 To determine whether a corporation has an NOL, figure the dividends-received deduction without the 80% (or 70%) of taxable income limit. 1040 ez forms 2012 Example 1. 1040 ez forms 2012 A corporation loses $25,000 from operations. 1040 ez forms 2012 It receives $100,000 in dividends from a 20%-owned corporation. 1040 ez forms 2012 Its taxable income is $75,000 ($100,000 – $25,000) before the deduction for dividends received. 1040 ez forms 2012 If it claims the full dividends-received deduction of $80,000 ($100,000 × 80%) and combines it with an operations loss of $25,000, it will have an NOL of ($5,000). 1040 ez forms 2012 Therefore, the 80% of taxable income limit does not apply. 1040 ez forms 2012 The corporation can deduct the full $80,000. 1040 ez forms 2012 Example 2. 1040 ez forms 2012 Assume the same facts as in Example 1, except that the corporation only loses $15,000 from operations. 1040 ez forms 2012 Its taxable income is $85,000 before the deduction for dividends received. 1040 ez forms 2012 After claiming the dividends-received deduction of $80,000 ($100,000 × 80%), its taxable income is $5,000. 1040 ez forms 2012 Because the corporation will not have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 80% of its taxable income, or $68,000 ($85,000 × 80%). 1040 ez forms 2012 Extraordinary Dividends If a corporation receives an extraordinary dividend on stock held 2 years or less before the dividend announcement date, it generally must reduce its basis in the stock by the nontaxed part of the dividend. 1040 ez forms 2012 The nontaxed part is any dividends-received deduction allowable for the dividends. 1040 ez forms 2012 Extraordinary dividend. 1040 ez forms 2012   An extraordinary dividend is any dividend on stock that equals or exceeds a certain percentage of the corporation's adjusted basis in the stock. 1040 ez forms 2012 The percentages are: 5% for stock preferred as to dividends, or 10% for other stock. 1040 ez forms 2012 Treat all dividends received that have ex-dividend dates within an 85-consecutive-day period as one dividend. 1040 ez forms 2012 Treat all dividends received that have ex-dividend dates within a 365-consecutive-day period as extraordinary dividends if the total of the dividends exceeds 20% of the corporation's adjusted basis in the stock. 1040 ez forms 2012 Disqualified preferred stock. 1040 ez forms 2012   Any dividend on disqualified preferred stock is treated as an extraordinary dividend regardless of the period of time the corporation held the stock. 1040 ez forms 2012   Disqualified preferred stock is any stock preferred as to dividends if any of the following apply. 1040 ez forms 2012 The stock when issued has a dividend rate that declines (or can reasonably be expected to decline) in the future. 1040 ez forms 2012 The issue price of the stock exceeds its liquidation rights or stated redemption price. 1040 ez forms 2012 The stock is otherwise structured to avoid the rules for extraordinary dividends and to enable corporate shareholders to reduce tax through a combination of dividends-received deductions and loss on the disposition of the stock. 1040 ez forms 2012   These rules apply to stock issued after July 10, 1989, unless it was issued under a written binding contract in effect on that date, and thereafter, before the issuance of the stock. 1040 ez forms 2012 More information. 1040 ez forms 2012   For more information on extraordinary dividends, see section 1059 of the Internal Revenue Code. 1040 ez forms 2012 Below-Market Loans If a corporation receives a below-market loan and uses the proceeds for its trade or business, it may be able to deduct the forgone interest. 1040 ez forms 2012 A below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. 1040 ez forms 2012 A below-market loan generally is treated as an arm's-length transaction in which the borrower is considered as having received both the following: A loan in exchange for a note that requires payment of interest at the applicable federal rate, and An additional payment in an amount equal to the forgone interest. 1040 ez forms 2012 Treat the additional payment as a gift, dividend, contribution to capital, payment of compensation, or other payment, depending on the substance of the transaction. 1040 ez forms 2012 Foregone interest. 1040 ez forms 2012   For any period, forgone interest is equal to: The interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. 1040 ez forms 2012 See Below-market loans, in chapter 4 of Publication 535 for more information. 1040 ez forms 2012 Charitable Contributions A corporation can claim a limited deduction for charitable contributions made in cash or other property. 1040 ez forms 2012 The contribution is deductible if made to, or for the use of, a qualified organization. 1040 ez forms 2012 For more information on qualified organizations, see Publication 526, Charitable Contributions. 1040 ez forms 2012 Also see, Exempt Organizations Select Check (EO Select Check) at www. 1040 ez forms 2012 irs. 1040 ez forms 2012 gov/charities, the on-line search tool for finding information on organizations eligible to receive tax-deductible contributions. 1040 ez forms 2012 Note. 1040 ez forms 2012 You cannot take a deduction if any of the net earnings of an organization receiving contributions benefit any private shareholder or individual. 1040 ez forms 2012 Cash method corporation. 1040 ez forms 2012   A corporation using the cash method of accounting deducts contributions in the tax year paid. 1040 ez forms 2012 Accrual method corporation. 1040 ez forms 2012   A corporation using an accrual method of accounting can choose to deduct unpaid contributions for the tax year the board of directors authorizes them if it pays them by the 15th day of the 3rd month after the close of that tax year. 1040 ez forms 2012 Make the choice by reporting the contribution on the corporation's return for the tax year. 1040 ez forms 2012 A declaration stating that the board of directors adopted the resolution during the tax year must accompany the return. 1040 ez forms 2012 The declaration must include the date the resolution was adopted. 1040 ez forms 2012 Limitations on deduction. 1040 ez forms 2012   A corporation cannot deduct charitable contributions that exceed 10% of its taxable income for the tax year. 1040 ez forms 2012 Figure taxable income for this purpose without the following. 1040 ez forms 2012 The deduction for charitable contributions. 1040 ez forms 2012 The dividends-received deduction. 1040 ez forms 2012 The deduction allowed under section 249 of the Internal Revenue Code. 1040 ez forms 2012 The domestic production activities deduction. 1040 ez forms 2012 Any net operating loss carryback to the tax year. 1040 ez forms 2012 Any capital loss carryback to the tax year. 1040 ez forms 2012 Farmers and ranchers. 1040 ez forms 2012    Corporations that are farmers and ranchers should see section 170(b)(2) of the Internal Revenue Code for special rules that may affect the deduction limit. 1040 ez forms 2012 Carryover of excess contributions. 1040 ez forms 2012   You can carry over, within certain limits, to each of the subsequent 5 years any charitable contributions made during the current year that exceed the 10% limit. 1040 ez forms 2012 You lose any excess not used within that period. 1040 ez forms 2012 For example, if a corporation has a carryover of excess contributions paid in 2010 and it does not use all the excess on its return for 2011, it can carry any excess over to 2012, 2013, 2014, and 2015, if applicable. 1040 ez forms 2012 Any excess not used in 2015 is lost. 1040 ez forms 2012 Do not deduct a carryover of excess contributions in the carryover year until after you deduct contributions made in that year (subject to the 10% limit). 1040 ez forms 2012 You cannot deduct a carryover of excess contributions to the extent it increases a net operating loss carryover. 1040 ez forms 2012 Cash contributions. 1040 ez forms 2012   A corporation must maintain a record of any contribution of cash, check, or other monetary contribution, regardless of the amount. 1040 ez forms 2012 The record can be a bank record, receipt, letter, or other written communication from the donee indicating the name of the organization, the date of the contribution, and the amount of the contribution. 1040 ez forms 2012 Keep the record of the contribution with the other corporate records. 1040 ez forms 2012 Do not attach the records to the corporation's return. 1040 ez forms 2012 For more information on cash contributions, see Publication 526. 1040 ez forms 2012 Gifts of $250 or more. 1040 ez forms 2012   Generally, no deduction is allowed for any contribution of $250 or more unless the corporation gets a written acknowledgement from the donee organization. 1040 ez forms 2012 The acknowledgement should show the amount of cash contributed, a description of the property contributed, and either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. 1040 ez forms 2012 The acknowledgement should be received by the due date (including extensions) of the return, or, if earlier, the date the return was filed. 1040 ez forms 2012 Keep the acknowledgement with other corporate records. 1040 ez forms 2012 Do not attach the acknowledgement to the return. 1040 ez forms 2012 Contributions of property other than cash. 1040 ez forms 2012   If a corporation (other than a closely-held or a personal service corporation) claims a deduction of more than $500 for contributions of property other than cash, a schedule describing the property and the method used to determine its fair market value must be attached to the corporation's return. 1040 ez forms 2012 In addition the corporation should keep a record of: The approximate date and manner of acquisition of the donated property and The cost or other basis of the donated property held by the donor for less than 12 months prior to contribution. 1040 ez forms 2012   Closely held and personal service corporations must complete and attach Form 8283, Noncash Charitable Contributions, to their returns if they claim a deduction of more than $500 for non-cash contributions. 1040 ez forms 2012 For all other corporations, if the deduction claimed for donated property exceeds $5,000, complete Form 8283 and attach it to the corporation's return. 1040 ez forms 2012   A corporation must obtain a qualified appraisal for all deductions of property claimed in excess of $5,000. 1040 ez forms 2012 A qualified appraisal is not required for the donation of cash, publicly traded securities, inventory, and any qualified vehicles sold by a donee organization without any significant intervening use or material improvement. 1040 ez forms 2012 The appraisal should be maintained with other corporate records and only attached to the corporation's return when the deduction claimed exceeds $500,000; $20,000 for donated art work. 1040 ez forms 2012   See Form 8283 for more information. 1040 ez forms 2012 Qualified conservation contributions. 1040 ez forms 2012   If a corporation makes a qualified conservation contribution, the corporation must provide information regarding the legal interest being donated, the fair market value of the underlying property before and after the donation, and a description of the conservation purpose for which the property will be used. 1040 ez forms 2012 For more information, see section 170(h) of the Internal Revenue Code. 1040 ez forms 2012 Contributions of used vehicles. 1040 ez forms 2012   A corporation is allowed a deduction for the contribution of used motor vehicles, boats, and airplanes. 1040 ez forms 2012 The deduction is limited, and other special rules apply. 1040 ez forms 2012 For more information, see Publication 526. 1040 ez forms 2012 Reduction for contributions of certain property. 1040 ez forms 2012   For a charitable contribution of property, the corporation must reduce the contribution by the sum of: The ordinary income and short-term capital gain that would have resulted if the property were sold at its FMV and For certain contributions, the long-term capital gain that would have resulted if the property were sold at its FMV. 1040 ez forms 2012   The reduction for the long-term capital gain applies to: Contributions of tangible personal property for use by an exempt organization for a purpose or function unrelated to the basis for its exemption; Contributions of any property to or for the use of certain private foundations except for stock for which market quotations are readily available; and Contributions of any patent, certain copyrights, trademark, trade name, trade secret, know-how, software (that is a section 197 intangible), or similar property, or applications or registrations of such property. 1040 ez forms 2012 Larger deduction. 1040 ez forms 2012   A corporation (other than an S corporation) may be able to claim a deduction equal to the lesser of (a) the basis of the donated inventory or property plus one-half of the inventory or property's appreciation (gain if the donated inventory or property was sold at fair market value on the date of the donation), or (b) two times basis of the donated inventory or property. 1040 ez forms 2012 This deduction may be allowed for certain contributions of: Certain inventory and other property made to a donee organization and used solely for the care of the ill, the needy, and infants. 1040 ez forms 2012 Scientific property constructed by the corporation (other than an S corporation, personal holding company, or personal service corporation) and donated no later than 2 years after substantial completion of the construction. 1040 ez forms 2012 The property must be donated to a qualified organization and its original use must be by the donee for research, experimentation, or research training within the United States in the area of physical or biological science. 1040 ez forms 2012 Computer technology and equipment acquired or constructed and donated no later than 3 years after either acquisition or substantial completion of construction to an educational organization for educational purposes within the United States. 1040 ez forms 2012 Contributions to organizations conducting lobbying activities. 1040 ez forms 2012   Contributions made to an organization that conducts lobbying activities are not deductible if: The lobbying activities relate to matters of direct financial interest to the donor's trade or business and The principal purpose of the contribution was to avoid federal income tax by obtaining a deduction for activities that would have been nondeductible under the lobbying expense rules if conducted directly by the donor. 1040 ez forms 2012 More information. 1040 ez forms 2012   For more information on charitable contributions, including substantiation and recordkeeping requirements, see section 170 of the Internal Revenue Code, the related regulations, and Publication 526. 1040 ez forms 2012 Capital Losses A corporation can deduct capital losses only up to the amount of its capital gains. 1040 ez forms 2012 In other words, if a corporation has an excess capital loss, it cannot deduct the loss in the current tax year. 1040 ez forms 2012 Instead, it carries the loss to other tax years and deducts it from any net capital gains that occur in those years. 1040 ez forms 2012 A capital loss is carried to other years in the following order. 1040 ez forms 2012 3 years prior to the loss year. 1040 ez forms 2012 2 years prior to the loss year. 1040 ez forms 2012 1 year prior to the loss year. 1040 ez forms 2012 Any loss remaining is carried forward for 5 years. 1040 ez forms 2012 When you carry a net capital loss to another tax year, treat it as a short-term loss. 1040 ez forms 2012 It does not retain its original identity as long term or short term. 1040 ez forms 2012 Example. 1040 ez forms 2012 A calendar year corporation has a net short-term capital gain of $3,000 and a net long-term capital loss of $9,000. 1040 ez forms 2012 The short-term gain offsets some of the long-term loss, leaving a net capital loss of $6,000. 1040 ez forms 2012 The corporation treats this $6,000 as a short-term loss when carried back or forward. 1040 ez forms 2012 The corporation carries the $6,000 short-term loss back 3 years. 1040 ez forms 2012 In year 1, the corporation had a net short-term capital gain of $8,000 and a net long-term capital gain of $5,000. 1040 ez forms 2012 It subtracts the $6,000 short-term loss first from the net short-term gain. 1040 ez forms 2012 This results in a net capital gain for year 1 of $7,000. 1040 ez forms 2012 This consists of a net short-term capital gain of $2,000 ($8,000 − $6,000) and a net long-term capital gain of $5,000. 1040 ez forms 2012 S corporation status. 1040 ez forms 2012   A corporation may not carry a capital loss from, or to, a year for which it is an S corporation. 1040 ez forms 2012 Rules for carryover and carryback. 1040 ez forms 2012   When carrying a capital loss from one year to another, the following rules apply. 1040 ez forms 2012 When figuring the current year's net capital loss, you cannot combine it with a capital loss carried from another year. 1040 ez forms 2012 In other words, you can carry capital losses only to years that would otherwise have a total net capital gain. 1040 ez forms 2012 If you carry capital losses from 2 or more years to the same year, deduct the loss from the earliest year first. 1040 ez forms 2012 You cannot use a capital loss carried from another year to produce or increase a net operating loss in the year to which you carry it back. 1040 ez forms 2012 Refunds. 1040 ez forms 2012   When you carry back a capital loss to an earlier tax year, refigure your tax for that year. 1040 ez forms 2012 If your corrected tax is less than the tax you originally owed, use either Form 1139, Corporate Application for Tentative Refund, or Form 1120X, Amended U. 1040 ez forms 2012 S. 1040 ez forms 2012 Corporation Income Tax Return, to apply for a refund. 1040 ez forms 2012 Form 1139. 1040 ez forms 2012    A corporation can get a refund faster by using Form 1139. 1040 ez forms 2012 It cannot file Form 1139 before filing the return for the corporation's capital loss year, but it must file Form 1139 no later than 1 year after the year it sustains the capital loss. 1040 ez forms 2012 Form 1120X. 1040 ez forms 2012   If the corporation does not file Form 1139, it must file Form 1120X to apply for a refund. 1040 ez forms 2012 The corporation must file the Form 1120X within 3 years of the due date, includin