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1040 Income Tax Forms

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1040 Income Tax Forms

1040 income tax forms 26. 1040 income tax forms   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. 1040 income tax forms Parking fees. 1040 income tax forms Advertising display on car. 1040 income tax forms Car pools. 1040 income tax forms Hauling tools or instruments. 1040 income tax forms Union members' trips from a union hall. 1040 income tax forms Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. 1040 income tax forms Statutory employees. 1040 income tax forms Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. 1040 income tax forms  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. 1040 income tax forms Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. 1040 income tax forms Depreciation limits on cars, trucks, and vans. 1040 income tax forms  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). 1040 income tax forms For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). 1040 income tax forms For more information, see Depreciation limits in Publication 463. 1040 income tax forms Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. 1040 income tax forms An ordinary expense is one that is common and accepted in your trade or business. 1040 income tax forms A necessary expense is one that is helpful and appropriate for your business. 1040 income tax forms An expense does not have to be required to be considered necessary. 1040 income tax forms This chapter explains the following. 1040 income tax forms What expenses are deductible. 1040 income tax forms How to report your expenses on your return. 1040 income tax forms What records you need to prove your expenses. 1040 income tax forms How to treat any expense reimbursements you may receive. 1040 income tax forms Who does not need to use this chapter. 1040 income tax forms   If you are an employee, you will not need to read this chapter if all of the following are true. 1040 income tax forms You fully accounted to your employer for your work-related expenses. 1040 income tax forms You received full reimbursement for your expenses. 1040 income tax forms Your employer required you to return any excess reimbursement and you did so. 1040 income tax forms There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. 1040 income tax forms If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. 1040 income tax forms See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. 1040 income tax forms    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. 1040 income tax forms Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. 1040 income tax forms This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. 1040 income tax forms It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. 1040 income tax forms Travel expenses defined. 1040 income tax forms   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. 1040 income tax forms   You will find examples of deductible travel expenses in Table 26-1 . 1040 income tax forms Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. 1040 income tax forms This rest requirement is not satisfied by merely napping in your car. 1040 income tax forms You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. 1040 income tax forms Example 1. 1040 income tax forms You are a railroad conductor. 1040 income tax forms You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. 1040 income tax forms During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. 1040 income tax forms You are considered to be away from home. 1040 income tax forms Example 2. 1040 income tax forms You are a truck driver. 1040 income tax forms You leave your terminal and return to it later the same day. 1040 income tax forms You get an hour off at your turnaround point to eat. 1040 income tax forms Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. 1040 income tax forms Members of the Armed Forces. 1040 income tax forms   If you are a member of the U. 1040 income tax forms S. 1040 income tax forms Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. 1040 income tax forms You cannot deduct your expenses for meals and lodging. 1040 income tax forms You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. 1040 income tax forms If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. 1040 income tax forms    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. 1040 income tax forms Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. 1040 income tax forms Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. 1040 income tax forms It includes the entire city or general area in which your business or work is located. 1040 income tax forms If you have more than one regular place of business, your tax home is your main place of business. 1040 income tax forms See Main place of business or work , later. 1040 income tax forms If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. 1040 income tax forms See No main place of business or work , later. 1040 income tax forms If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. 1040 income tax forms As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. 1040 income tax forms Main place of business or work. 1040 income tax forms   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. 1040 income tax forms The total time you ordinarily spend in each place. 1040 income tax forms The level of your business activity in each place. 1040 income tax forms Whether your income from each place is significant or insignificant. 1040 income tax forms Example. 1040 income tax forms You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. 1040 income tax forms You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. 1040 income tax forms Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. 1040 income tax forms No main place of business or work. 1040 income tax forms   You may have a tax home even if you do not have a regular or main place of business or work. 1040 income tax forms Your tax home may be the home where you regularly live. 1040 income tax forms Factors used to determine tax home. 1040 income tax forms   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. 1040 income tax forms You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. 1040 income tax forms You have living expenses at your main home that you duplicate because your business requires you to be away from that home. 1040 income tax forms You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. 1040 income tax forms   If you satisfy all three factors, your tax home is the home where you regularly live. 1040 income tax forms If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. 1040 income tax forms If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. 1040 income tax forms Example. 1040 income tax forms You are single and live in Boston in an apartment you rent. 1040 income tax forms You have worked for your employer in Boston for a number of years. 1040 income tax forms Your employer enrolls you in a 12-month executive training program. 1040 income tax forms You do not expect to return to work in Boston after you complete your training. 1040 income tax forms During your training, you do not do any work in Boston. 1040 income tax forms Instead, you receive classroom and on-the-job training throughout the United States. 1040 income tax forms You keep your apartment in Boston and return to it frequently. 1040 income tax forms You use your apartment to conduct your personal business. 1040 income tax forms You also keep up your community contacts in Boston. 1040 income tax forms When you complete your training, you are transferred to Los Angeles. 1040 income tax forms You do not satisfy factor (1) because you did not work in Boston. 1040 income tax forms You satisfy factor (2) because you had duplicate living expenses. 1040 income tax forms You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. 1040 income tax forms Therefore, you have a tax home in Boston. 1040 income tax forms Tax home different from family home. 1040 income tax forms   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. 1040 income tax forms You also cannot deduct the cost of meals and lodging while at your tax home. 1040 income tax forms See Example 1 . 1040 income tax forms   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. 1040 income tax forms See Example 2 . 1040 income tax forms Example 1. 1040 income tax forms You are a truck driver and you and your family live in Tucson. 1040 income tax forms You are employed by a trucking firm that has its terminal in Phoenix. 1040 income tax forms At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. 1040 income tax forms You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. 1040 income tax forms This is because Phoenix is your tax home. 1040 income tax forms Example 2. 1040 income tax forms Your family home is in Pittsburgh, where you work 12 weeks a year. 1040 income tax forms The rest of the year you work for the same employer in Baltimore. 1040 income tax forms In Baltimore, you eat in restaurants and sleep in a rooming house. 1040 income tax forms Your salary is the same whether you are in Pittsburgh or Baltimore. 1040 income tax forms Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. 1040 income tax forms You cannot deduct any expenses you have for meals and lodging there. 1040 income tax forms However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. 1040 income tax forms You can deduct the cost of your round trip between Baltimore and Pittsburgh. 1040 income tax forms You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. 1040 income tax forms Temporary Assignment or Job You may regularly work at your tax home and also work at another location. 1040 income tax forms It may not be practical to return to your tax home from this other location at the end of each work day. 1040 income tax forms Temporary assignment vs. 1040 income tax forms indefinite assignment. 1040 income tax forms   If your assignment or job away from your main place of work is temporary, your tax home does not change. 1040 income tax forms You are considered to be away from home for the whole period you are away from your main place of work. 1040 income tax forms You can deduct your travel expenses if they otherwise qualify for deduction. 1040 income tax forms Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. 1040 income tax forms   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. 1040 income tax forms An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. 1040 income tax forms   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. 1040 income tax forms You may be able to deduct the cost of relocating to your new tax home as a moving expense. 1040 income tax forms See Publication 521 for more information. 1040 income tax forms Exception for federal crime investigations or prosecutions. 1040 income tax forms   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. 1040 income tax forms This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. 1040 income tax forms   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. 1040 income tax forms Determining temporary or indefinite. 1040 income tax forms   You must determine whether your assignment is temporary or indefinite when you start work. 1040 income tax forms If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. 1040 income tax forms An assignment or job that is initially temporary may become indefinite due to changed circumstances. 1040 income tax forms A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. 1040 income tax forms Going home on days off. 1040 income tax forms   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. 1040 income tax forms You cannot deduct the cost of your meals and lodging there. 1040 income tax forms However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. 1040 income tax forms You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. 1040 income tax forms   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. 1040 income tax forms In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. 1040 income tax forms Probationary work period. 1040 income tax forms   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. 1040 income tax forms You cannot deduct any of your expenses for meals and lodging during the probationary period. 1040 income tax forms What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. 1040 income tax forms You can deduct ordinary and necessary expenses you have when you travel away from home on business. 1040 income tax forms The type of expense you can deduct depends on the facts and your circumstances. 1040 income tax forms Table 26-1 summarizes travel expenses you may be able to deduct. 1040 income tax forms You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. 1040 income tax forms When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. 1040 income tax forms You can use a log, diary, notebook, or any other written record to keep track of your expenses. 1040 income tax forms The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. 1040 income tax forms Separating costs. 1040 income tax forms   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. 1040 income tax forms You must have a reasonable basis for making this allocation. 1040 income tax forms For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. 1040 income tax forms Travel expenses for another individual. 1040 income tax forms   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. 1040 income tax forms Employee. 1040 income tax forms   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. 1040 income tax forms Business associate. 1040 income tax forms   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. 1040 income tax forms A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. 1040 income tax forms A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. 1040 income tax forms Bona fide business purpose. 1040 income tax forms   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. 1040 income tax forms Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. 1040 income tax forms Example. 1040 income tax forms Jerry drives to Chicago on business and takes his wife, Linda, with him. 1040 income tax forms Linda is not Jerry's employee. 1040 income tax forms Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. 1040 income tax forms The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. 1040 income tax forms Her expenses are not deductible. 1040 income tax forms Jerry pays $199 a day for a double room. 1040 income tax forms A single room costs $149 a day. 1040 income tax forms He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. 1040 income tax forms If he uses public transportation, he can deduct only his fare. 1040 income tax forms Table 26-1. 1040 income tax forms Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. 1040 income tax forms IF you have expenses for. 1040 income tax forms . 1040 income tax forms . 1040 income tax forms THEN you can deduct the cost of. 1040 income tax forms . 1040 income tax forms . 1040 income tax forms transportation travel by airplane, train, bus, or car between your home and your business destination. 1040 income tax forms If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. 1040 income tax forms If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. 1040 income tax forms taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. 1040 income tax forms baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. 1040 income tax forms car operating and maintaining your car when traveling away from home on business. 1040 income tax forms You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. 1040 income tax forms If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. 1040 income tax forms lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. 1040 income tax forms Meals include amounts spent for food, beverages, taxes, and related tips. 1040 income tax forms See Meals and Incidental Expenses for additional rules and limits. 1040 income tax forms cleaning dry cleaning and laundry. 1040 income tax forms telephone business calls while on your business trip. 1040 income tax forms This includes business communication by fax machine or other communication devices. 1040 income tax forms tips tips you pay for any expenses in this chart. 1040 income tax forms other other similar ordinary and necessary expenses related to your business travel. 1040 income tax forms These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. 1040 income tax forms Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. 1040 income tax forms It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. 1040 income tax forms The meal is business-related entertainment. 1040 income tax forms Business-related entertainment is discussed under Entertainment Expenses , later. 1040 income tax forms The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. 1040 income tax forms Lavish or extravagant. 1040 income tax forms   You cannot deduct expenses for meals that are lavish or extravagant. 1040 income tax forms An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. 1040 income tax forms Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. 1040 income tax forms 50% limit on meals. 1040 income tax forms   You can figure your meal expenses using either of the following methods. 1040 income tax forms Actual cost. 1040 income tax forms The standard meal allowance. 1040 income tax forms Both of these methods are explained below. 1040 income tax forms But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. 1040 income tax forms   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. 1040 income tax forms If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. 1040 income tax forms The 50% limit is explained later under Entertainment Expenses . 1040 income tax forms Accountable and nonaccountable plans are discussed later under Reimbursements . 1040 income tax forms Actual cost. 1040 income tax forms   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. 1040 income tax forms If you use this method, you must keep records of your actual cost. 1040 income tax forms Standard meal allowance. 1040 income tax forms   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. 1040 income tax forms It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. 1040 income tax forms The set amount varies depending on where and when you travel. 1040 income tax forms In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . 1040 income tax forms If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. 1040 income tax forms See Recordkeeping , later. 1040 income tax forms Incidental expenses. 1040 income tax forms   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. 1040 income tax forms Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. 1040 income tax forms Incidental expenses only method. 1040 income tax forms   You can use an optional method (instead of actual cost) for deducting incidental expenses only. 1040 income tax forms The amount of the deduction is $5 a day. 1040 income tax forms You can use this method only if you did not pay or incur any meal expenses. 1040 income tax forms You cannot use this method on any day that you use the standard meal allowance. 1040 income tax forms    Federal employees should refer to the Federal Travel Regulations at  www. 1040 income tax forms gsa. 1040 income tax forms gov. 1040 income tax forms Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. 1040 income tax forms 50% limit may apply. 1040 income tax forms   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. 1040 income tax forms If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. 1040 income tax forms The 50% limit is explained later under Entertainment Expenses . 1040 income tax forms Accountable and nonaccountable plans are discussed later under Reimbursements . 1040 income tax forms There is no optional standard lodging amount similar to the standard meal allowance. 1040 income tax forms Your allowable lodging expense deduction is your actual cost. 1040 income tax forms Who can use the standard meal allowance. 1040 income tax forms   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. 1040 income tax forms   Use of the standard meal allowance for other travel. 1040 income tax forms    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. 1040 income tax forms You can also use it to figure your meal expenses when you travel for qualifying educational purposes. 1040 income tax forms You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. 1040 income tax forms Amount of standard meal allowance. 1040 income tax forms   The standard meal allowance is the federal M&IE rate. 1040 income tax forms For travel in 2013, the daily rate for most small localities in the United States is $46. 1040 income tax forms   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. 1040 income tax forms You can find this information (organized by state) on the Internet at www. 1040 income tax forms gsa. 1040 income tax forms gov. 1040 income tax forms Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. 1040 income tax forms However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. 1040 income tax forms You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. 1040 income tax forms   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. 1040 income tax forms If you work in the transportation industry, however, see Special rate for transportation workers , later. 1040 income tax forms Standard meal allowance for areas outside the continental United States. 1040 income tax forms    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. 1040 income tax forms The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. 1040 income tax forms S. 1040 income tax forms Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. 1040 income tax forms The Department of State establishes per diem rates for all other foreign areas. 1040 income tax forms    You can access per diem rates for non-foreign areas outside the continental United States at: www. 1040 income tax forms defensetravel. 1040 income tax forms dod. 1040 income tax forms mil/site/perdiemCalc. 1040 income tax forms cfm. 1040 income tax forms You can access all other foreign per diem rates at www. 1040 income tax forms state. 1040 income tax forms gov/travel/. 1040 income tax forms Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. 1040 income tax forms Special rate for transportation workers. 1040 income tax forms   You can use a special standard meal allowance if you work in the transportation industry. 1040 income tax forms You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. 1040 income tax forms If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). 1040 income tax forms   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. 1040 income tax forms If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. 1040 income tax forms Travel for days you depart and return. 1040 income tax forms   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). 1040 income tax forms You can do so by one of two methods. 1040 income tax forms Method 1: You can claim 3/4 of the standard meal allowance. 1040 income tax forms Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. 1040 income tax forms Example. 1040 income tax forms Jen is employed in New Orleans as a convention planner. 1040 income tax forms In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. 1040 income tax forms She left her home in New Orleans at 10 a. 1040 income tax forms m. 1040 income tax forms on Wednesday and arrived in Washington, DC, at 5:30 p. 1040 income tax forms m. 1040 income tax forms After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. 1040 income tax forms m. 1040 income tax forms Jen's employer gave her a flat amount to cover her expenses and included it with her wages. 1040 income tax forms Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. 1040 income tax forms Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. 1040 income tax forms For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. 1040 income tax forms Travel in the United States The following discussion applies to travel in the United States. 1040 income tax forms For this purpose, the United States includes only the 50 states and the District of Columbia. 1040 income tax forms The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. 1040 income tax forms See Part of Trip Outside the United States , later. 1040 income tax forms Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. 1040 income tax forms If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. 1040 income tax forms These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. 1040 income tax forms Example. 1040 income tax forms You work in Atlanta and take a business trip to New Orleans in May. 1040 income tax forms On your way home, you stop in Mobile to visit your parents. 1040 income tax forms You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. 1040 income tax forms If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. 1040 income tax forms You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. 1040 income tax forms The deduction for your meals is subject to the 50% limit on meals mentioned earlier. 1040 income tax forms Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. 1040 income tax forms However, you can deduct any expenses you have while at your destination that are directly related to your business. 1040 income tax forms A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. 1040 income tax forms The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. 1040 income tax forms Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. 1040 income tax forms For the part of your trip that is inside the United States, use the rules for travel in the United States. 1040 income tax forms Travel outside the United States does not include travel from one point in the United States to another point in the United States. 1040 income tax forms The following discussion can help you determine whether your trip was entirely within the United States. 1040 income tax forms Public transportation. 1040 income tax forms   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. 1040 income tax forms Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . 1040 income tax forms Example. 1040 income tax forms You fly from New York to Puerto Rico with a scheduled stop in Miami. 1040 income tax forms You return to New York nonstop. 1040 income tax forms The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. 1040 income tax forms Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. 1040 income tax forms Private car. 1040 income tax forms   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. 1040 income tax forms Example. 1040 income tax forms You travel by car from Denver to Mexico City and return. 1040 income tax forms Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. 1040 income tax forms The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. 1040 income tax forms Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. 1040 income tax forms For this purpose, the United States includes only the 50 states and the District of Columbia. 1040 income tax forms How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. 1040 income tax forms See chapter 1 of Publication 463 for information on luxury water travel. 1040 income tax forms Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. 1040 income tax forms Travel entirely for business. 1040 income tax forms   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. 1040 income tax forms Travel considered entirely for business. 1040 income tax forms   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. 1040 income tax forms Exception 1 - No substantial control. 1040 income tax forms   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. 1040 income tax forms The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. 1040 income tax forms   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. 1040 income tax forms    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . 1040 income tax forms   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. 1040 income tax forms    A self-employed person generally has substantial control over arranging business trips. 1040 income tax forms Exception 2 - Outside United States no more than a week. 1040 income tax forms   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. 1040 income tax forms One week means 7 consecutive days. 1040 income tax forms In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. 1040 income tax forms Exception 3 - Less than 25% of time on personal activities. 1040 income tax forms   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. 1040 income tax forms For this purpose, count both the day your trip began and the day it ended. 1040 income tax forms Exception 4 - Vacation not a major consideration. 1040 income tax forms   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. 1040 income tax forms Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. 1040 income tax forms You can only deduct the business portion of your cost of getting to and from your destination. 1040 income tax forms You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. 1040 income tax forms These travel allocation rules are discussed in chapter 1 of Publication 463. 1040 income tax forms You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. 1040 income tax forms In those cases, you can deduct the total cost of getting to and from your destination. 1040 income tax forms Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. 1040 income tax forms If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. 1040 income tax forms Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. 1040 income tax forms You cannot deduct the travel expenses for your family. 1040 income tax forms If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. 1040 income tax forms Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. 1040 income tax forms You can deduct your travel expenses only if your attendance is connected to your own trade or business. 1040 income tax forms Convention agenda. 1040 income tax forms   The convention agenda or program generally shows the purpose of the convention. 1040 income tax forms You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. 1040 income tax forms The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. 1040 income tax forms Conventions held outside the North American area. 1040 income tax forms    See chapter 1 of Publication 463 for information on conventions held outside the North American area. 1040 income tax forms Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. 1040 income tax forms You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. 1040 income tax forms Directly-related test. 1040 income tax forms Associated test. 1040 income tax forms Both of these tests are explained in chapter 2 of Publication 463. 1040 income tax forms The amount you can deduct for entertainment expenses may be limited. 1040 income tax forms Generally, you can deduct only 50% of your unreimbursed entertainment expenses. 1040 income tax forms This limit is discussed next. 1040 income tax forms 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. 1040 income tax forms (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. 1040 income tax forms See Individuals subject to “hours of service” limits , later. 1040 income tax forms ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. 1040 income tax forms Figure 26-A summarizes the general rules explained in this section. 1040 income tax forms The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. 1040 income tax forms Included expenses. 1040 income tax forms   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. 1040 income tax forms However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. 1040 income tax forms Application of 50% limit. 1040 income tax forms   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. 1040 income tax forms   The 50% limit also applies to certain meal and entertainment expenses that are not business related. 1040 income tax forms It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. 1040 income tax forms It also applies to the cost of meals included in deductible educational expenses. 1040 income tax forms When to apply the 50% limit. 1040 income tax forms   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. 1040 income tax forms You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. 1040 income tax forms Example 1. 1040 income tax forms You spend $200 for a business-related meal. 1040 income tax forms If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. 1040 income tax forms Your deduction cannot be more than $45 (. 1040 income tax forms 50 × $90). 1040 income tax forms Example 2. 1040 income tax forms You purchase two tickets to a concert and give them to a client. 1040 income tax forms You purchased the tickets through a ticket agent. 1040 income tax forms You paid $200 for the two tickets, which had a face value of $80 each ($160 total). 1040 income tax forms Your deduction cannot be more than $80 (. 1040 income tax forms 50 × $160). 1040 income tax forms Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. 1040 income tax forms Figure 26-A can help you determine if the 50% limit applies to you. 1040 income tax forms Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. 1040 income tax forms Employee's reimbursed expenses. 1040 income tax forms   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. 1040 income tax forms Accountable plans are discussed later under Reimbursements . 1040 income tax forms Individuals subject to “hours of service” limits. 1040 income tax forms   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. 1040 income tax forms The percentage is 80%. 1040 income tax forms   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. 1040 income tax forms Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. 1040 income tax forms Interstate truck operators and bus drivers who are under Department of Transportation regulations. 1040 income tax forms Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. 1040 income tax forms Certain merchant mariners who are under Coast Guard regulations. 1040 income tax forms Other exceptions. 1040 income tax forms   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. 1040 income tax forms These are discussed in Publication 463. 1040 income tax forms Figure 26-A. 1040 income tax forms Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. 1040 income tax forms See Exceptions to the 50% Limit . 1040 income tax forms Please click here for the text description of the image. 1040 income tax forms Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. 1040 income tax forms Entertainment. 1040 income tax forms    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. 1040 income tax forms Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. 1040 income tax forms A meal as a form of entertainment. 1040 income tax forms   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. 1040 income tax forms A meal expense includes the cost of food, beverages, taxes, and tips for the meal. 1040 income tax forms To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. 1040 income tax forms You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. 1040 income tax forms Separating costs. 1040 income tax forms   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. 1040 income tax forms You must have a reasonable basis for making this allocation. 1040 income tax forms For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. 1040 income tax forms Taking turns paying for meals or entertainment. 1040 income tax forms   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. 1040 income tax forms Lavish or extravagant expenses. 1040 income tax forms   You cannot deduct expenses for entertainment that are lavish or extravagant. 1040 income tax forms An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. 1040 income tax forms Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. 1040 income tax forms Trade association meetings. 1040 income tax forms    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. 1040 income tax forms These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. 1040 income tax forms Entertainment tickets. 1040 income tax forms   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. 1040 income tax forms For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. 1040 income tax forms What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. 1040 income tax forms Club dues and membership fees. 1040 income tax forms   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. 1040 income tax forms This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. 1040 income tax forms   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. 1040 income tax forms You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. 1040 income tax forms Entertainment facilities. 1040 income tax forms   Generally, you cannot deduct any expense for the use of an entertainment facility. 1040 income tax forms This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. 1040 income tax forms   An entertainment facility is any property you own, rent, or use for entertainment. 1040 income tax forms Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. 1040 income tax forms Out-of-pocket expenses. 1040 income tax forms   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. 1040 income tax forms These are not expenses for the use of an entertainment facility. 1040 income tax forms However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. 1040 income tax forms Additional information. 1040 income tax forms   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. 1040 income tax forms Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. 1040 income tax forms This section explains the limits and rules for deducting the costs of gifts. 1040 income tax forms $25 limit. 1040 income tax forms   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. 1040 income tax forms A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. 1040 income tax forms   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. 1040 income tax forms This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. 1040 income tax forms   If you and your spouse both give gifts, both of you are treated as one taxpayer. 1040 income tax forms It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. 1040 income tax forms If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. 1040 income tax forms Incidental costs. 1040 income tax forms   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. 1040 income tax forms   A cost is incidental only if it does not add substantial value to the gift. 1040 income tax forms For example, the cost of customary gift wrapping is an incidental cost. 1040 income tax forms However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. 1040 income tax forms Exceptions. 1040 income tax forms   The following items are not considered gifts for purposes of the $25 limit. 1040 income tax forms An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. 1040 income tax forms Examples include pens, desk sets, and plastic bags and cases. 1040 income tax forms Signs, display racks, or other promotional material to be used on the business premises of the recipient. 1040 income tax forms Gift or entertainment. 1040 income tax forms   Any item that might be considered either a gift or entertainment generally will be considered entertainment. 1040 income tax forms However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. 1040 income tax forms    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. 1040 income tax forms You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. 1040 income tax forms    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. 1040 income tax forms You cannot choose, in this case, to treat the cost of the tickets as a gift expense. 1040 income tax forms Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . 1040 income tax forms These expenses include the cost of transportation by air, rail, bus, taxi, etc. 1040 income tax forms , and the cost of driving and maintaining your car. 1040 income tax forms Transportation expenses include the ordinary and necessary costs of all of the following. 1040 income tax forms Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. 1040 income tax forms (Tax home is defined earlier under Travel Expenses . 1040 income tax forms ) Visiting clients or customers. 1040 income tax forms Going to a business meeting away from your regular workplace. 1040 income tax forms Getting from your home to a temporary workplace when you have one or more regular places of work. 1040 income tax forms These temporary workplaces can be either within the area of your tax home or outside that area. 1040 income tax forms Transportation expenses do not include expenses you have while traveling away from home overnight. 1040 income tax forms Those expenses are travel expenses, discussed earlier. 1040 income tax forms However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. 1040 income tax forms See Car Expenses , later. 1040 income tax forms Illustration of transportation expenses. 1040 income tax forms    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. 1040 income tax forms You may want to refer to it when deciding whether you can deduct your transportation expenses. 1040 income tax forms Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. 1040 income tax forms However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. 1040 income tax forms Temporary work location. 1040 income tax forms   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. 1040 income tax forms   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. 1040 income tax forms   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. 1040 income tax forms   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. 1040 income tax forms It will not be treated as temporary after the date you determine it will last more than 1 year. 1040 income tax forms   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. 1040 income tax forms You may have deductible travel expenses as discussed earlier in this chapter. 1040 income tax forms No regular place of work. 1040 income tax forms   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. 1040 income tax forms   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. 1040 income tax forms   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. 1040 income tax forms These are nondeductible commuting expenses. 1040 income tax forms Two places of work. 1040 income tax forms   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. 1040 income tax forms However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. 1040 income tax forms   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. 1040 income tax forms You cannot deduct them. 1040 income tax forms Armed Forces reservists. 1040 income tax forms   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. 1040 income tax forms You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. 1040 income tax forms   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. 1040 income tax forms In this case, your transportation generally is a nondeductible commuting expense. 1040 income tax forms However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. 1040 income tax forms   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. 1040 income tax forms   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. 1040 income tax forms These expenses are discussed earlier under Travel Expenses . 1040 income tax forms   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. 1040 income tax forms See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. 1040 income tax forms Commuting expenses. 1040 income tax forms   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. 1040 income tax forms These costs are personal commuting expenses. 1040 income tax forms You cannot deduct commuting expenses no matter how far your home is from your regular place of work. 1040 income tax forms You cannot deduct commuting expenses even if you work during the commuting trip. 1040 income tax forms Example. 1040 income tax forms You sometimes use your cell phone to make business calls while commuting to and from work. 1040 income tax forms Sometimes business associates ride with you to and from work, and you have a business discussion in the car. 1040 income tax forms These activities do not change the trip from personal to business. 1040 income tax forms You cannot deduct your commuting expenses. 1040 income tax forms Parking fees. 1040 income tax forms   Fees you pay to park your car at your place of business are nondeductible commuting expenses. 1040 income tax forms You can, however, deduct business-related parking fees when visiting a customer or client. 1040 income tax forms Advertising display on car. 1040 income tax forms   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. 1040 income tax forms If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. 1040 income tax forms Car pools. 1040 income tax forms   You cannot deduct the cost of using your car in a nonprofit car pool. 1040 income tax forms Do not include payments you receive from the passengers in your income. 1040 income tax forms These payments are considered reimbursements of your expenses. 1040 income tax forms However, if you operate a car pool for a profit, you must include payments from passengers in your income. 1040 income tax forms You can then deduct your car expenses (using the rules in this chapter). 1040 income tax forms Hauling tools or instruments. 1040 income tax forms   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. 1040 income tax forms However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). 1040 income tax forms Union members' trips from a union hall. 1040 income tax forms   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. 1040 income tax forms Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. 1040 income tax forms Office in the home. 1040 income tax forms   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. 1040 income tax forms (See chapter 28 for information on determining if your home office qualifies as a principal place of business. 1040 income tax forms ) Figure 26-B. 1040 income tax forms When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. 1040 income tax forms (Do not use this chart if your home is your principal place of business. 1040 income tax forms See Office in the home . 1040 income tax forms ) Please click here for the text description of the image. 1040 income tax forms Figure 26-B. 1040 income tax forms Local Transportation Examples of deductible transportation. 1040 income tax forms   The following examples show when you can deduct transportation expenses based on the location of your work and your home. 1040 income tax forms Example 1. 1040 income tax forms You regularly work in an office in the city where you live. 1040 income tax forms Your employer sends you to a 1-week training session at a different office in the same city. 1040 income tax forms You travel directly from your home to the training location and return each day. 1040 income tax forms You can deduct the cost of your daily round-trip transportation between your home and the training location. 1040 income tax forms Example 2. 1040 income tax forms Your principal place of business is in your home. 1040 income tax forms You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. 1040 income tax forms Example 3. 1040 income tax forms You have no regular office, and you do not have an office in your home. 1040 income tax forms In this case, the location of your first business contact inside the metropolitan area is considered your office. 1040 income tax forms Transportation expenses between your home and this first contact are nondeductible commuting expenses. 1040 income tax forms Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. 1040 income tax forms While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. 1040 income tax forms With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. 1040 income tax forms Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. 1040 income tax forms You generally can use one of the two following methods to figure your deductible expenses. 1040 income tax forms Standard mileage rate. 1040 income tax forms Actual car expenses. 1040 income tax forms If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. 1040 income tax forms See Leasing a car under Actual Car Expenses, later. 1040 income tax forms In this chapter, “car” includes a van, pickup, or panel truck. 1040 income tax forms Rural mail carriers. 1040 income tax forms   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. 1040 income tax forms Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. 1040 income tax forms   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). 1040 income tax forms You must complete Form 2106 and attach it to your Form 1040. 1040 income tax forms   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. 1040 income tax forms It is given as an equipment maintenance allowance (EMA) to employees of the U. 1040 income tax forms S. 1040 income tax forms Postal Service. 1040 income tax forms It is at the rate contained in the 1991 collective bargaining agreement. 1040 income tax forms Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. 1040 income tax forms See your employer for information on your reimbursement. 1040 income tax forms If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. 1040 income tax forms Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. 1040 income tax forms For 2013, the standard mileage rate for business use is 56½ cents per mile. 1040 income tax forms If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. 1040 income tax forms You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. 1040 income tax forms See Reimbursements under How To Report, later. 1040 income tax forms Choosing the standard mileage rate. 1040 income tax forms   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. 1040 income tax forms Then in later years, you can choose to use either the standard mileage rate or actual expenses. 1040 income tax forms   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. 1040 income tax forms   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. 1040 income tax forms You cannot revoke the choice. 1040 income tax forms However, in a later year, you can switch from the standard mileage rate to the actual expenses method. 1040 income tax forms If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. 1040 income tax forms Example. 1040 income tax forms Larry is an employee who occasionally uses his own car for business purposes. 1040 income tax forms He purchased the car in 2011, but he did not claim any unreimburse
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Understanding your CP180/CP181 Notice

We sent you this notice because your tax return is missing a schedule or form.


What you need to do

  • Read the notice carefully to determine the required schedule or form needed to complete your return.
  • Download the required schedule or form or call 1-800-829-3676.
  • Fill out the Contact Information section of the notice, detach, and send it to us with your completed schedule or form so we receive it by the date indicated on the notice.

You may want to...

  • Review the filing requirements and instructions for the missing schedule or form to determine whether your organization needs to file.
  • Review your records to ensure all applicable schedules and forms were attached when filed.

Answers to Common Questions

What happens if I don't respond by the due date?
If you don't respond by the due date of the notice, your tax and/or credits may be adjusted which may result in a balance due.

Who do I call for assistance?
For assistance with your business return, call 1-800-829-0115 or, for assistance with Form 990-T, call 1-877-829-5500.


Tips for next year

Refer to the instructions for your tax return for required documentation. Attach all required forms and schedules to your tax return when filing.

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.


Understanding your notice

Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

CP180

Notice CP180, Page 1
 

Notice CP180, Page 2
 

CP181

Notice CP181, Page 1
 

Notice CP181, Page 2
 

Page Last Reviewed or Updated: 01-Jul-2013

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 1040 Income Tax Forms

1040 income tax forms 30. 1040 income tax forms   How To Figure Your Tax Table of Contents Introduction Figuring Your Tax Alternative Minimum Tax (AMT) Tax Figured by IRSFiling the Return Introduction After you have figured your income and deductions as explained in Parts One through Five, your next step is to figure your tax. 1040 income tax forms This chapter discusses: The general steps you take to figure your tax, An additional tax you may have to pay called the alternative minimum tax (AMT), and The conditions you must meet if you want the IRS to figure your tax. 1040 income tax forms Figuring Your Tax Your income tax is based on your taxable income. 1040 income tax forms After you figure your income tax and AMT, if any, subtract your tax credits and add any other taxes you may owe. 1040 income tax forms The result is your total tax. 1040 income tax forms Compare your total tax with your total payments to determine whether you are entitled to a refund or if you must make a payment. 1040 income tax forms This section provides a general outline of how to figure your tax. 1040 income tax forms You can find step-by-step directions in the Instructions for Forms 1040EZ, 1040A, and 1040. 1040 income tax forms If you are unsure of which tax form you should file, see Which Form Should I Use? in chapter 1. 1040 income tax forms Tax. 1040 income tax forms   Most taxpayers use either the Tax Table or the Tax Computation Worksheet to figure their income tax. 1040 income tax forms However, there are special methods if your income includes any of the following items. 1040 income tax forms A net capital gain. 1040 income tax forms (See chapter 16. 1040 income tax forms ) Qualified dividends taxed at the same rates as a net capital gain. 1040 income tax forms (See chapters 8 and 16. 1040 income tax forms ) Lump-sum distributions. 1040 income tax forms (See chapter 10. 1040 income tax forms ) Farming or fishing income. 1040 income tax forms (See Schedule J (Form 1040), Income Averaging for Farmers and Fishermen. 1040 income tax forms ) Unearned income over $2,000 for certain children. 1040 income tax forms (See chapter 31. 1040 income tax forms ) Parents' election to report child's interest and dividends. 1040 income tax forms (See chapter 31. 1040 income tax forms ) Foreign earned income exclusion or the housing exclusion. 1040 income tax forms (See Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion, and the Foreign Earned Income Tax Worksheet in the Form 1040 instructions. 1040 income tax forms ) Credits. 1040 income tax forms   After you figure your income tax and any AMT (discussed later), determine if you are eligible for any tax credits. 1040 income tax forms Eligibility information for these tax credits is discussed in chapters 32 through 37 and your form instructions. 1040 income tax forms The following table lists the credits you may be able to subtract from your tax and shows where you can find more information on each credit. 1040 income tax forms CREDITS For information on: See  chapter: Adoption 37 Alternative motor vehicle 37 Alternative fuel vehicle refueling  property 37 Child and dependent care 32 Child tax 34 Credit to holders of tax credit  bonds 37 Education 35 Elderly or disabled 33 Electric vehicle 37 Foreign tax 37 Mortgage interest 37 Prior year minimum tax 37 Residential energy 37 Retirement savings contributions 37   Some credits (such as the earned income credit) are not listed because they are treated as payments. 1040 income tax forms See Payments , later. 1040 income tax forms   There are other credits that are not discussed in this publication. 1040 income tax forms These include the following credits. 1040 income tax forms General business credit, which is made up of several separate business-related credits. 1040 income tax forms These generally are reported on Form 3800, General Business Credit, and are discussed in chapter 4 of Publication 334, Tax Guide for Small Business. 1040 income tax forms Renewable electricity, refined coal, and Indian coal production credit for electricity and refined coal produced at facilities placed in service after October 22, 2004 (after October 2, 2008, for electricity produced from marine and hydrokinetic renewables), and Indian coal produced at facilities placed in service after August 8, 2005. 1040 income tax forms See Form 8835, Part II. 1040 income tax forms Work opportunity credit. 1040 income tax forms See Form 5884. 1040 income tax forms Credit for employer social security and Medicare taxes paid on certain employee tips. 1040 income tax forms See Form 8846. 1040 income tax forms Other taxes. 1040 income tax forms   After you subtract your tax credits, determine whether there are any other taxes you must pay. 1040 income tax forms This chapter does not explain these other taxes. 1040 income tax forms You can find that information in other chapters of this publication and your form instructions. 1040 income tax forms See the following table for other taxes you may need to add to your income tax. 1040 income tax forms OTHER TAXES For information on: See  chapter: Additional taxes on qualified retirement plans and IRAs 10, 17 Household employment taxes 32 Recapture of an education credit 35 Social security and Medicare tax on wages 5 Social security and Medicare tax on tips 6 Uncollected social security and Medicare tax on tips 6   You also may have to pay AMT (discussed later in this chapter). 1040 income tax forms   There are other taxes that are not discussed in this publication. 1040 income tax forms These include the following items. 1040 income tax forms Self-employment tax. 1040 income tax forms You must figure this tax if either of the following applies to you (or your spouse if you file a joint return). 1040 income tax forms Your net earnings from self-employment from other than church employee income were $400 or more. 1040 income tax forms The term “net earnings from self-employment” may include certain nonemployee compensation and other amounts reported to you on Form 1099-MISC, Miscellaneous Income. 1040 income tax forms If you received a Form 1099-MISC, see the Instructions for Recipient on the back. 1040 income tax forms Also see the Instructions for Schedule SE (Form 1040), Self-Employment Tax; and Publication 334, Tax Guide for Small Business. 1040 income tax forms You had church employee income of $108. 1040 income tax forms 28 or more. 1040 income tax forms Additional Medicare Tax. 1040 income tax forms Beginning in 2013, you may be subject to a 0. 1040 income tax forms 9% Additional Medicare Tax that applies to Medicare wages, Railroad Retirement Act compensation, and self-employment income over a threshold based on your filing status. 1040 income tax forms For more information, see the Instructions for Form 1040, line 60 and Form 8959. 1040 income tax forms Net Investment Income Tax (NIIT). 1040 income tax forms Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). 1040 income tax forms NIIT is a 3. 1040 income tax forms 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income over a threshold amount. 1040 income tax forms For more information, see the Instructions for Form 1040, line 60 and Form 8960. 1040 income tax forms Recapture taxes. 1040 income tax forms You may have to pay these taxes if you previously claimed an investment credit, a low-income housing credit, a new markets credit, a qualified plug-in electric drive motor vehicle credit, an alternative motor vehicle credit, a credit for employer-provided child care facilities, an Indian employment credit, or other credits listed in the instructions for Form 1040, line 60. 1040 income tax forms For more information, see the instructions for Form 1040, line 60. 1040 income tax forms Section 72(m)(5) excess benefits tax. 1040 income tax forms If you are (or were) a 5% owner of a business and you received a distribution that exceeds the benefits provided for you under the qualified pension or annuity plan formula, you may have to pay this additional tax. 1040 income tax forms See Tax on Excess Benefits in chapter 4 of Publication 560, Retirement Plans for Small Business. 1040 income tax forms Uncollected social security and Medicare tax on group-term life insurance. 1040 income tax forms If your former employer provides you with more than $50,000 of group-term life insurance coverage, you must pay the employee part of social security and Medicare taxes on those premiums. 1040 income tax forms The amount should be shown in box 12 of your Form W-2 with codes M and N. 1040 income tax forms Tax on golden parachute payments. 1040 income tax forms This tax applies if you received an “excess parachute payment” (EPP) due to a change in a corporation's ownership or control. 1040 income tax forms The amount should be shown in box 12 of your Form W-2 with code K. 1040 income tax forms See the instructions for Form 1040, line 60. 1040 income tax forms Tax on accumulation distribution of trusts. 1040 income tax forms This applies if you are the beneficiary of a trust that accumulated its income instead of distributing it currently. 1040 income tax forms See Form 4970 and its instructions. 1040 income tax forms Additional tax on HSAs or MSAs. 1040 income tax forms If amounts contributed to, or distributed from, your health savings account or medical savings account do not meet the rules for these accounts, you may have to pay additional taxes. 1040 income tax forms See Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; Form 8853, Archer MSAs and Long-Term Care Insurance Contracts; Form 8889, Health Savings Accounts (HSAs); and Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. 1040 income tax forms Additional tax on Coverdell ESAs. 1040 income tax forms This applies if amounts contributed to, or distributed from, your Coverdell ESA do not meet the rules for these accounts. 1040 income tax forms See Publication 970, Tax Benefits for Education, and Form 5329. 1040 income tax forms Additional tax on qualified tuition programs. 1040 income tax forms This applies to amounts distributed from qualified tuition programs that do not meet the rules for these accounts. 1040 income tax forms See Publication 970 and Form 5329. 1040 income tax forms Excise tax on insider stock compensation from an expatriated corporation. 1040 income tax forms You may owe a 15% excise tax on the value of nonstatutory stock options and certain other stock-based compensation held by you or a member of your family from an expatriated corporation or its expanded affiliated group in which you were an officer, director, or more-than-10% owner. 1040 income tax forms For more information, see the instructions for Form 1040, line 60. 1040 income tax forms Additional tax on income you received from a nonqualified deferred compensation plan that fails to meet certain requirements. 1040 income tax forms This income should be shown in Form W-2, box 12, with code Z, or in Form 1099-MISC, box 15b. 1040 income tax forms For more information, see the instructions for Form 1040, line 60. 1040 income tax forms Interest on the tax due on installment income from the sale of certain residential lots and timeshares. 1040 income tax forms For more information, see the instructions for Form 1040, line 60. 1040 income tax forms Interest on the deferred tax on gain from certain installment sales with a sales price over $150,000. 1040 income tax forms For more information, see the instructions for Form 1040, line 60. 1040 income tax forms Repayment of first-time homebuyer credit. 1040 income tax forms For more information, see Form 5405, Repayment of the First-Time Homebuyer Credit, and its instructions. 1040 income tax forms Also see the instructions for Form 1040, line 59b. 1040 income tax forms Payments. 1040 income tax forms   After you determine your total tax, figure the total payments you have already made for the year. 1040 income tax forms Include credits that are treated as payments. 1040 income tax forms This chapter does not explain these payments and credits. 1040 income tax forms You can find that information in other chapters of this publication and your form instructions. 1040 income tax forms See the following table for amounts you can include in your total payments. 1040 income tax forms PAYMENTS For information on: See  chapter: Child tax credit (additional) 34 Earned income credit 36 Estimated tax paid 4 Excess social security   and RRTA tax withheld 37 Federal income tax withheld 4 Health coverage tax credit 37 Credit for tax on   undistributed capital gain 37 Tax paid with extension 1   Another credit that is treated as a payment is the credit for federal excise tax paid on fuels. 1040 income tax forms This credit is for persons who have a nontaxable use of certain fuels, such as diesel fuel and kerosene. 1040 income tax forms It is claimed on Form 1040, line 70. 1040 income tax forms See Form 4136, Credit for Federal Tax Paid on Fuels. 1040 income tax forms Refund or balance due. 1040 income tax forms   To determine whether you are entitled to a refund or whether you must make a payment, compare your total payments with your total tax. 1040 income tax forms If you are entitled to a refund, see your form instructions for information on having it directly deposited into one or more of your accounts, or to purchase U. 1040 income tax forms S. 1040 income tax forms savings bonds instead of receiving a paper check. 1040 income tax forms Alternative Minimum Tax (AMT) This section briefly discusses an additional tax you may have to pay. 1040 income tax forms The tax law gives special treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. 1040 income tax forms Taxpayers who benefit from this special treatment may have to pay at least a minimum amount of tax through an additional tax called AMT. 1040 income tax forms You may have to pay the AMT if your taxable income for regular tax purposes, combined with certain adjustments and tax preference items, is more than a certain amount. 1040 income tax forms See Form 6251, Alternative Minimum Tax — Individuals. 1040 income tax forms Adjustments and tax preference items. 1040 income tax forms   The more common adjustments and tax preference items include: Addition of personal exemptions, Addition of the standard deduction (if claimed), Addition of itemized deductions claimed for state and local taxes, certain interest, most miscellaneous deductions, and part of medical expenses, Subtraction of any refund of state and local taxes included in gross income, Changes to accelerated depreciation of certain property, Difference between gain or loss on the sale of property reported for regular tax purposes and AMT purposes, Addition of certain income from incentive stock options, Change in certain passive activity loss deductions, Addition of certain depletion that is more than the adjusted basis of the property, Addition of part of the deduction for certain intangible drilling costs, and Addition of tax-exempt interest on certain private activity bonds. 1040 income tax forms More information. 1040 income tax forms   For more information about the AMT, see the instructions for Form 6251. 1040 income tax forms Tax Figured by IRS If you file by April 15, 2014, you can have the IRS figure your tax for you on Form 1040EZ, Form 1040A, or Form 1040. 1040 income tax forms If the IRS figures your tax and you paid too much, you will receive a refund. 1040 income tax forms If you did not pay enough, you will receive a bill for the balance. 1040 income tax forms To avoid interest or the penalty for late payment, you must pay the bill within 30 days of the date of the bill or by the due date for your return, whichever is later. 1040 income tax forms The IRS can also figure the credit for the elderly or the disabled and the earned income credit for you. 1040 income tax forms When the IRS cannot figure your tax. 1040 income tax forms   The IRS cannot figure your tax for you if any of the following apply. 1040 income tax forms You want your refund directly deposited into your accounts. 1040 income tax forms You want any part of your refund applied to your 2014 estimated tax. 1040 income tax forms You had income for the year from sources other than wages, salaries, tips, interest, dividends, taxable social security benefits, unemployment compensation, IRA distributions, pensions, and annuities. 1040 income tax forms Your taxable income is $100,000 or more. 1040 income tax forms You itemize deductions. 1040 income tax forms You file any of the following forms. 1040 income tax forms Form 2555, Foreign Earned Income. 1040 income tax forms Form 2555-EZ, Foreign Earned Income Exclusion. 1040 income tax forms Form 4137, Social Security and Medicare Tax on Unreported Tip Income. 1040 income tax forms Form 4970, Tax on Accumulation Distribution of Trusts. 1040 income tax forms Form 4972, Tax on Lump-Sum Distributions. 1040 income tax forms Form 6198, At-Risk Limitations. 1040 income tax forms Form 6251, Alternative Minimum Tax—Individuals. 1040 income tax forms Form 8606, Nondeductible IRAs. 1040 income tax forms Form 8615, Tax for Certain Children Who Have Unearned Income. 1040 income tax forms Form 8814, Parents' Election To Report Child's Interest and Dividends. 1040 income tax forms Form 8839, Qualified Adoption Expenses. 1040 income tax forms Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. 1040 income tax forms Form 8889, Health Savings Accounts (HSAs). 1040 income tax forms Form 8919, Uncollected Social Security and Medicare Tax on Wages. 1040 income tax forms Filing the Return After you complete the line entries for the tax form you are filing, fill in your name and address. 1040 income tax forms Enter your social security number in the space provided. 1040 income tax forms If you are married, enter the social security numbers of you and your spouse even if you file separately. 1040 income tax forms Sign and date your return and enter your occupation(s). 1040 income tax forms If you are filing a joint return, both you and your spouse must sign it. 1040 income tax forms Enter your daytime phone number in the space provided. 1040 income tax forms This may help speed the processing of your return if we have a question that can be answered over the phone. 1040 income tax forms If you are filing a joint return, you may enter either your or your spouse's daytime phone number. 1040 income tax forms If you want to allow a friend, family member, or any other person you choose to discuss your 2013 tax return with the IRS, check the “Yes” box in the “Third party designee” area on your return. 1040 income tax forms Also enter the designee's name, phone number, and any five digits the designee chooses as his or her personal identification number (PIN). 1040 income tax forms If you check the “Yes” box, you, and your spouse if filing a joint return, are authorizing the IRS to call the designee to answer any questions that may arise during the processing of your return. 1040 income tax forms Fill in and attach any schedules and forms asked for on the lines you completed to your paper return. 1040 income tax forms Attach a copy of each of your Forms W-2 to your paper return. 1040 income tax forms Also attach to your paper return any Form 1099-R you received that has withholding tax in box 4. 1040 income tax forms Mail your return to the Internal Revenue Service Center for the area where you live. 1040 income tax forms A list of Service Center addresses is in the instructions for your tax return. 1040 income tax forms Form 1040EZ Line Entries Read lines 1 through 8b and fill in the lines that apply to you. 1040 income tax forms Do not complete lines 9 through 12. 1040 income tax forms If you are filing a joint return, use the space to the left of line 6 to separately show your taxable income and your spouse's taxable income. 1040 income tax forms Payments. 1040 income tax forms   Enter any federal income tax withheld on line 7. 1040 income tax forms Federal income tax withheld is shown on Form W-2, box 2, or Form 1099, box 4. 1040 income tax forms Earned income credit. 1040 income tax forms   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. 1040 income tax forms Enter “EIC” in the space to the left of line 8a. 1040 income tax forms Enter the nontaxable combat pay you elect to include in earned income on line 8b. 1040 income tax forms   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862, Information To Claim Earned Income Credit After Disallowance, with your return. 1040 income tax forms For details, see the Form 1040EZ Instructions. 1040 income tax forms Form 1040A Line Entries Read lines 1 through 27 and fill in the lines that apply to you. 1040 income tax forms If you are filing a joint return, use the space to the left of the entry space for line 27 to separately show your taxable income and your spouse's taxable income. 1040 income tax forms Do not complete line 28. 1040 income tax forms Complete lines 29 through 33 and 36 through 40 if they apply to you. 1040 income tax forms However, do not fill in lines 30 and 38a if you want the IRS to figure the credits shown on those lines. 1040 income tax forms Also, enter any write-in information that applies to you in the space to the left of line 41. 1040 income tax forms Do not complete lines 34, 35, and 42 through 46. 1040 income tax forms Payments. 1040 income tax forms   Enter any federal income tax withheld that is shown on Form W-2, box 2, or Form 1099, box 4, on line 36. 1040 income tax forms Enter any estimated tax payments you made on line 37. 1040 income tax forms Credit for child and dependent care expenses. 1040 income tax forms   If you can take this credit, as discussed in chapter 32, complete Form 2441, Child and Dependent Care Expenses, and attach it to your return. 1040 income tax forms Enter the amount of the credit on line 29. 1040 income tax forms The IRS will not figure this credit. 1040 income tax forms Credit for the elderly or the disabled. 1040 income tax forms   If you can take this credit, as discussed in chapter 33, the IRS can figure it for you. 1040 income tax forms Enter “CFE” in the space to the left of line 30 and attach Schedule R (Form 1040A or 1040), Credit for the Elderly or the Disabled, to your paper return. 1040 income tax forms On Schedule R (Form 1040A or 1040), check the box in Part I for your filing status and age. 1040 income tax forms Complete Part II and Part III, lines 11 and 13, if they apply. 1040 income tax forms Earned income credit. 1040 income tax forms   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. 1040 income tax forms Enter “EIC” to the left of the entry space for line 38a. 1040 income tax forms Enter the nontaxable combat pay you elect to include in earned income on line 38b. 1040 income tax forms    If you have a qualifying child, you must fill in Schedule EIC (Form 1040A or 1040), Earned Income Credit, and attach it to your paper return. 1040 income tax forms If you do not provide the child's social security number on Schedule EIC, line 2, the credit will be reduced or disallowed unless the child was born and died in 2013. 1040 income tax forms   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862 with your return. 1040 income tax forms For details, see the Form 1040A Instructions. 1040 income tax forms Form 1040 Line Entries Read lines 1 through 43 and fill in the lines that apply to you. 1040 income tax forms Do not complete line 44. 1040 income tax forms If you are filing a joint return, use the space under the words “Adjusted Gross Income” on the front of your return to separately show your taxable income and your spouse's taxable income. 1040 income tax forms Read lines 45 through 71. 1040 income tax forms Fill in the lines that apply to you, but do not fill in lines 54, 61, and 72. 1040 income tax forms Also, do not complete line 55 and lines 73 through 77. 1040 income tax forms Do not fill in line 53, box “c,” if you are completing Schedule R (Form 1040A or 1040), or line 64a if you want the IRS to figure the credits shown on those lines. 1040 income tax forms Payments. 1040 income tax forms   Enter any federal income tax withheld that is shown on Form W-2, box 2, or Form 1099, box 4, on line 62. 1040 income tax forms Enter any estimated tax payments you made on line 63. 1040 income tax forms Credit for child and dependent care expenses. 1040 income tax forms   If you can take this credit, as discussed in chapter 32, complete Form 2441 and attach it to your paper return. 1040 income tax forms Enter the amount of the credit on line 48. 1040 income tax forms The IRS will not figure this credit. 1040 income tax forms Credit for the elderly or the disabled. 1040 income tax forms   If you can take this credit, as discussed in chapter 33, the IRS can figure it for you. 1040 income tax forms Enter “CFE” on the line next to line 53, check box “c,” and attach Schedule R (Form 1040A or 1040) to your paper return. 1040 income tax forms On Schedule R (Form 1040A or 1040), check the box in Part I for your filing status and age. 1040 income tax forms Complete Part II and Part III, lines 11 and 13, if they apply. 1040 income tax forms Earned income credit. 1040 income tax forms   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. 1040 income tax forms Enter “EIC” on the dotted line next to Form 1040, line 64a. 1040 income tax forms Enter the nontaxable combat pay you elect to include in earned income on line 64b. 1040 income tax forms   If you have a qualifying child, you must fill in Schedule EIC (Form 1040A or 1040), Earned Income Credit, and attach it to your paper return. 1040 income tax forms If you do not provide the child's social security number on Schedule EIC, line 2, the credit will be reduced or disallowed unless the child was born and died in 2013. 1040 income tax forms   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862 with your return. 1040 income tax forms For details, see the Form 1040 Instructions. 1040 income tax forms Prev  Up  Next   Home   More Online Publications