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1040 Nr Software

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1040 Nr Software

1040 nr software 3. 1040 nr software   Unrelated Trade or Business Table of Contents Selling of products of exempt functions. 1040 nr software Dual use of assets or facilities. 1040 nr software Exploitation of exempt functions. 1040 nr software ExamplesExceptions. 1040 nr software Excluded Trade or Business ActivitiesQualified sponsorship payment. 1040 nr software Advertising. 1040 nr software Exception for contingent payments. 1040 nr software Exception for periodicals. 1040 nr software Exception for conventions and trade shows. 1040 nr software Legal definition. 1040 nr software Legal where played. 1040 nr software No for-profit games where played. 1040 nr software Unrelated business income. 1040 nr software   Unrelated business income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. 1040 nr software   Certain trade or business activities are not treated as an unrelated trade or business. 1040 nr software See Excluded Trade or Business Activities, later. 1040 nr software Trade or business. 1040 nr software   The term “trade or business” generally includes any activity conducted for the production of income from selling goods or performing services. 1040 nr software An activity does not lose its identity as a trade or business merely because it is conducted within a larger group of similar activities that may or may not be related to the exempt purposes of the organization. 1040 nr software   For example, the regular sale of pharmaceutical supplies to the general public by a hospital pharmacy does not lose its identity as a trade or business, even though the pharmacy also furnishes supplies to the hospital and patients of the hospital in accordance with its exempt purpose. 1040 nr software Similarly, soliciting, selling, and publishing commercial advertising is a trade or business even though the advertising is published in an exempt organization's periodical that contains editorial matter related to the organization's exempt purpose. 1040 nr software Regularly conducted. 1040 nr software   Business activities of an exempt organization ordinarily are considered regularly conducted if they show a frequency and continuity, and are pursued in a manner similar to comparable commercial activities of nonexempt organizations. 1040 nr software   For example, a hospital auxiliary's operation of a sandwich stand for 2 weeks at a state fair would not be the regular conduct of a trade or business. 1040 nr software The stand would not compete with similar facilities that a nonexempt organization would ordinarily operate year-round. 1040 nr software However, operating a commercial parking lot every Saturday, year-round, would be the regular conduct of a trade or business. 1040 nr software Not substantially related. 1040 nr software    A business activity is not substantially related to an organization's exempt purpose if it does not contribute importantly to accomplishing that purpose (other than through the production of funds). 1040 nr software Whether an activity contributes importantly depends in each case on the facts involved. 1040 nr software   In determining whether activities contribute importantly to the accomplishment of an exempt purpose, the size and extent of the activities involved must be considered in relation to the nature and extent of the exempt function that they intend to serve. 1040 nr software For example, to the extent an activity is conducted on a scale larger than is reasonably necessary to perform an exempt purpose, it does not contribute importantly to the accomplishment of the exempt purpose. 1040 nr software The part of the activity that is more than needed to accomplish the exempt purpose is an unrelated trade or business. 1040 nr software   Also in determining whether activities contribute importantly to the accomplishment of an exempt purpose, the following principles apply. 1040 nr software Selling of products of exempt functions. 1040 nr software   Ordinarily, selling products that result from the performance of exempt functions is not an unrelated trade or business if the product is sold in substantially the same state it is in when the exempt functions are completed. 1040 nr software Thus, for an exempt organization engaged in rehabilitating handicapped persons (its exempt function), selling articles made by these persons as part of their rehabilitation training is not an unrelated trade or business. 1040 nr software   However, if a completed product resulting from an exempt function is used or exploited in further business activity beyond what is reasonably appropriate or necessary to dispose of it as is, the activity is an unrelated trade or business. 1040 nr software For example, if an exempt organization maintains an experimental dairy herd for scientific purposes, the sale of milk and cream produced in the ordinary course of operation of the project is not an unrelated trade or business. 1040 nr software But if the organization uses the milk and cream in the further manufacture of food items such as ice cream, pastries, etc. 1040 nr software , the sale of these products is an unrelated trade or business unless the manufacturing activities themselves contribute importantly to the accomplishment of an exempt purpose of the organization. 1040 nr software Dual use of assets or facilities. 1040 nr software   If an asset or facility necessary to the conduct of exempt functions is also used in commercial activities, its use for exempt functions does not, by itself, make the commercial activities a related trade or business. 1040 nr software The test, as discussed earlier, is whether the activities contribute importantly to the accomplishment of exempt purposes. 1040 nr software   For example, a museum has a theater auditorium designed for showing educational films in connection with its program of public education in the arts and sciences. 1040 nr software The theater is a principal feature of the museum and operates continuously while the museum is open to the public. 1040 nr software If the organization also operates the theater as a motion picture theater for the public when the museum is closed, the activity is an unrelated trade or business. 1040 nr software   For information on allocating expenses for the dual use of assets or facilities, see Deductions in chapter 4. 1040 nr software Exploitation of exempt functions. 1040 nr software   Exempt activities sometimes create goodwill or other intangibles that can be exploited in a commercial way. 1040 nr software When an organization exploits such an intangible in commercial activities, the fact that the income depends in part upon an exempt function of the organization does not make the commercial activities a related trade or business. 1040 nr software Unless the commercial exploitation contributes importantly to the accomplishment of the exempt purpose, the commercial activities are an unrelated trade or business. 1040 nr software   For the treatment of expenses attributable to the exploitation of exempt activities, see Deductions in chapter 4. 1040 nr software Examples The following are examples of activities that were determined to be (or not to be) unrelated trades or businesses using the definitions and principles just discussed. 1040 nr software Sales commissions. 1040 nr software   An agricultural organization, whose exempt purposes are to promote better conditions for cattle breeders and to improve the breed generally, engages in an unrelated trade or business when it regularly sells cattle for its members on a commission basis. 1040 nr software Artists' facilities. 1040 nr software   An organization whose exempt purpose is to stimulate and foster public interest in the fine arts by promoting art exhibits, sponsoring cultural events, and furnishing information about fine arts leases studio apartments to artist tenants and operates a dining hall primarily for these tenants. 1040 nr software These two activities do not contribute importantly to accomplishing the organization's exempt purpose. 1040 nr software Therefore, they are unrelated trades or businesses. 1040 nr software Membership list sales. 1040 nr software   An exempt educational organization regularly sells membership mailing lists to business firms. 1040 nr software This activity does not contribute importantly to the accomplishment of the organization's exempt purpose and therefore is an unrelated trade or business. 1040 nr software Also see Exchange or rental of member lists under Excluded Trade or Business Activities, later. 1040 nr software Hospital facilities. 1040 nr software   An exempt hospital leases its adjacent office building and furnishes certain office services to a hospital-based medical group for a fee. 1040 nr software The group provides all diagnostic and therapeutic procedures to the hospital's patients and operates the hospital's emergency room on a 24-hour basis. 1040 nr software The leasing activity is substantially related to the hospital's exempt purpose and is not an unrelated trade or business. 1040 nr software   The hospital also operates a gift shop patronized by patients, visitors making purchases for patients, and employees; a cafeteria and coffee shop primarily for employees and medical staff; and a parking lot for patients and visitors only. 1040 nr software These activities are also substantially related to the hospital's exempt purpose and do not constitute unrelated trades or businesses. 1040 nr software Book publishing. 1040 nr software   An exempt organization engages primarily in activities that further its exempt purposes. 1040 nr software It also owns the publication rights to a book that does not relate to any of its exempt purposes. 1040 nr software The organization exploits the book in a commercial manner by arranging for printing, distribution, publicity, and advertising in connection with the sale of the book. 1040 nr software These activities constitute a trade or business regularly conducted. 1040 nr software Because exploiting the book is unrelated to the organization's exempt purposes (except for the use of the book's profits), the income is unrelated business income. 1040 nr software   However, if the organization transfers publication rights to a commercial publisher in return for royalties, the royalty income received will not be unrelated business income. 1040 nr software See Royalties under Exclusions in chapter 4. 1040 nr software School handicraft shop. 1040 nr software   An exempt vocational school operates a handicraft shop that sells articles made by students in their regular courses of instruction. 1040 nr software The students are paid a percentage of the sales price. 1040 nr software In addition, the shop sells products made by local residents who make articles at home according to the shop's specifications. 1040 nr software The shop manager periodically inspects the articles during their manufacture to ensure that they meet desired standards of style and quality. 1040 nr software Although many local participants are former students of the school, any qualified person may participate in the program. 1040 nr software The sale of articles made by students does not constitute an unrelated trade or business, but the sale of products made by local residents is an unrelated trade or business and is subject to unrelated business income tax. 1040 nr software School facilities. 1040 nr software   An exempt school has tennis courts and dressing rooms that it uses during the regular school year in its educational program. 1040 nr software During the summer, the school operates a tennis club open to the general public. 1040 nr software Employees of the school run the club, including collecting membership fees and scheduling court time. 1040 nr software   Another exempt school leases the same type of facilities to an unrelated individual who runs a tennis club for the summer. 1040 nr software The lease is for a fixed fee that does not depend on the income or profits derived from the leased property. 1040 nr software   In both situations, the exempt purpose is the advancement of education. 1040 nr software Furnishing tennis facilities in the manner described does not further that exempt purpose. 1040 nr software These activities are unrelated trades or businesses. 1040 nr software However, in the second situation the income derived from the leasing of the property is excluded from unrelated business taxable income as rent from real property. 1040 nr software See Rents under Exclusions in chapter 4. 1040 nr software Services provided with lease. 1040 nr software   An exempt university leases its football stadium during several months of the year to a professional football team for a fixed fee. 1040 nr software Under the lease agreement, the university furnishes heat, light, and water and is responsible for all ground maintenance. 1040 nr software It also provides dressing room, linen, and stadium security services for the professional team. 1040 nr software   Leasing of the stadium is an unrelated trade or business. 1040 nr software In addition, the substantial services furnished for the convenience of the lessee go beyond those usually provided with the rental of space for occupancy only. 1040 nr software Therefore, the income from this lease is rent from real property and unrelated business taxable income. 1040 nr software Broadcasting rights. 1040 nr software   An exempt collegiate athletic conference conducts an annual competitive athletic game between its conference champion and another collegiate team. 1040 nr software Income is derived from admission charges and the sale of exclusive broadcasting rights to a national radio and television network. 1040 nr software An athletic program is considered an integral part of the educational process of a university. 1040 nr software   The educational purposes served by intercollegiate athletics are identical whether conducted directly by individual universities or by their regional athletic conference. 1040 nr software Also, the educational purposes served by exhibiting a game before an audience that is physically present and exhibiting the game on television or radio before a much larger audience are substantially similar. 1040 nr software Therefore, the sale of the broadcasting rights contributes importantly to the accomplishment of the organization's exempt purpose and is not an unrelated trade or business. 1040 nr software   In a similar situation, an exempt organization was created as a national governing body for amateur athletes to foster interest in amateur sports and to encourage widespread public participation. 1040 nr software The organization receives income each year from the sale of exclusive broadcasting rights to an independent producer, who contracts with a commercial network to broadcast many of the athletic events sponsored, supervised, and regulated by the organization. 1040 nr software   The broadcasting of these events promotes the various amateur sports, fosters widespread public interest in the benefits of the organization's nationwide amateur program, and encourages public participation. 1040 nr software The sale of the rights and the broadcasting of the events contribute importantly to the organization's exempt purpose. 1040 nr software Therefore, the sale of the exclusive broadcasting rights is not an unrelated trade or business. 1040 nr software Yearbook advertising. 1040 nr software   An exempt organization receives income from the sale of advertising in its annual yearbook. 1040 nr software The organization hires an independent commercial firm, under a contract covering a full calendar year, to conduct an intensive advertising solicitation campaign in the organization's name. 1040 nr software This firm is paid a percentage of the gross advertising receipts for selling the advertising, collecting from advertisers, and printing the yearbook. 1040 nr software This advertising activity is an unrelated trade or business. 1040 nr software Pet boarding and grooming services. 1040 nr software   An exempt organization, organized and operated for the prevention of cruelty to animals, receives unrelated business income from providing pet boarding and grooming services for the general public. 1040 nr software These activities do not contribute importantly to its purpose of preventing cruelty to animals. 1040 nr software Museum eating facilities. 1040 nr software   An exempt art museum operates a dining room, a cafeteria, and a snack bar for use by the museum staff, employees, and visitors. 1040 nr software Eating facilities in the museum help to attract visitors and allow them to spend more time viewing the museum's exhibits without having to seek outside restaurants at mealtime. 1040 nr software The eating facilities also allow the museum staff and employees to remain in the museum throughout the day. 1040 nr software Thus, the museum's operation of the eating facilities contributes importantly to the accomplishment of its exempt purposes and is not unrelated trade or business. 1040 nr software Halfway house workshop. 1040 nr software   A halfway house organized to provide room, board, therapy, and counseling for persons discharged from alcoholic treatment centers also operates a furniture shop to provide full-time employment for its residents. 1040 nr software The profits are applied to the operating costs of the halfway house. 1040 nr software The income from this venture is not unrelated trade or business income because the furniture shop contributes importantly to the organization's purpose of aiding its residents' transition from treatment to a normal and productive life. 1040 nr software Travel tour programs. 1040 nr software   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose for which tax exemption was granted to the organization. 1040 nr software Example 1. 1040 nr software A tax-exempt university alumni association provides a travel tour program for its members and their families. 1040 nr software The organization works with various travel agencies and schedules approximately ten tours a year to various places around the world. 1040 nr software It mails out promotional material and accepts reservations for fees paid by the travel agencies on a per-person basis. 1040 nr software The organization provides an employee for each tour as a tour leader. 1040 nr software There is no formal educational program conducted with these tours, and they do not differ from regular commercially operated tours. 1040 nr software By providing travel tours to its members, the organization is engaging in a regularly conducted trade or business. 1040 nr software Even if the tours it offers support the university, financially and otherwise, and encourage alumni to do the same, they do not contribute importantly to the organization's exempt purpose of promoting education. 1040 nr software Therefore, the sale of the travel tours is an unrelated trade or business. 1040 nr software Example 2. 1040 nr software A tax-exempt organization formed for the purpose of educating individuals about the geography and the culture of the United States provides study tours to national parks and other locations within the United States. 1040 nr software These tours are conducted by teachers and others certified by the state board of education. 1040 nr software The tours are primarily designed for students enrolled in degree programs at state educational institutions but are open to all who agree to participate in the required study program associated with the tour taken. 1040 nr software A tour's study program consists of instruction on subjects related to the location being visited on the tour. 1040 nr software Each tour group brings along a library of material related to the subjects being studied on the tour. 1040 nr software During the tour, 5 or 6 hours per day are devoted to organized study, preparation of reports, lectures, instruction, and recitation by the students. 1040 nr software Examinations are given at the end of each tour. 1040 nr software The state board of education awards academic credit for tour participation. 1040 nr software Because these tours are substantially related to the organization's exempt purpose, they are not an unrelated trade or business. 1040 nr software Insurance programs. 1040 nr software   An organization that acts as a group insurance policyholder for its members and collects a fee for performing administrative services is normally carrying on an unrelated trade or business. 1040 nr software Exceptions. 1040 nr software   Organizations whose exempt activities may include the provision of insurance benefits, such as fraternal beneficiary societies, voluntary employees beneficiary associations, and labor organizations, are generally exceptions to this rule. 1040 nr software Magazine publishing. 1040 nr software   An association of credit unions with tax-exempt status as a business league publishes a consumer-oriented magazine four times a year and makes it available to member credit unions for purchase. 1040 nr software   By selling a magazine to its members as a promotional device, the organization furnishes its members with a regular commercial service they can use in their own operations. 1040 nr software This service does not promote the improvement of business conditions of one or more lines of business, which is the exempt purpose of a business league. 1040 nr software   Since the activity does not contribute importantly to the organization's exempt function, it is an unrelated trade or business. 1040 nr software Directory of members. 1040 nr software   A business league publishes an annual directory that contains a list of all its members, their addresses, and their area of expertise. 1040 nr software Each member has the same amount of space in the directory, and its format does not emphasize the relative importance or reputation of any member. 1040 nr software The directory contains no commercial advertisement and is sold only to the organization's members. 1040 nr software   The directory facilitates communication among the members and encourages the exchange of ideas and expertise. 1040 nr software Because the directory lists the members in a similar noncommercial format without advertising and is not distributed to the public, its sale does not confer private commercial benefits on the members. 1040 nr software The sale of the directory does contribute importantly to the organization's exempt purpose and is not an unrelated trade or business. 1040 nr software This directory differs from the publication discussed next because of its noncommercial characteristics. 1040 nr software Sales of advertising space. 1040 nr software   A national association of law enforcement officials publishes a monthly journal that contains articles and other editorial material of professional interest to its members. 1040 nr software The journal is distributed without charge, mainly to the organization's members. 1040 nr software   The organization sells advertising space in the journal either for conventional advertising or to merely identify the purchaser without a commercial message. 1040 nr software Some of the noncommercial advertising identifies the purchaser in a separate space, and some consists of listings of 60 or more purchasers per page. 1040 nr software A business firm identified in a separate space is further identified in an Index of Advertisers. 1040 nr software   The organization solicits advertising by personal contacts. 1040 nr software Advertising from large firms is solicited by contacting their chief executive officer or community relations officer rather than their advertising manager. 1040 nr software The organization also solicits advertising in form letters appealing for corporate and personal contributions. 1040 nr software   An exempt organization's sale of advertising placed for the purchaser's commercial benefit is a commercial activity. 1040 nr software Goodwill derived by the purchaser from being identified as a patron of the organization is usually considered a form of commercial benefit. 1040 nr software Therefore, advertising in an exempt organization's publication is generally presumed to be placed for the purchaser's commercial benefit, even if it has no commercial message. 1040 nr software However, this presumption is not conclusive if the purchaser's patronage would be difficult to justify commercially in view of the facts and circumstances. 1040 nr software In that case, other factors should also be considered in determining whether a commercial benefit can be expected. 1040 nr software Those other factors include: The normal manner in which the publication is circulated; The territorial scope of the circulation; The extent to which its readers, promoters, or the like could reasonably be expected to further, either directly or indirectly, the commercial interest of the advertisers; The eligibility of the publishing organization to receive tax-deductible contributions; and The commercial or noncommercial methods used to solicit the advertisers. 1040 nr software   In this situation, the purchaser of a separate advertising space without a commercial message can nevertheless expect a commercial benefit from the goodwill derived from being identified in that manner as a patron of the organization. 1040 nr software However, the purchaser of a listing cannot expect more than an inconsequential benefit. 1040 nr software Therefore, the sale of separate spaces, but not the listings, is an unrelated trade or business. 1040 nr software Publishing legal notices. 1040 nr software   A bar association publishes a legal journal containing opinions of the county court, articles of professional interest to lawyers, advertisements for products and services used by the legal profession, and legal notices. 1040 nr software The legal notices are published to satisfy state laws requiring publication of notices in connection with legal proceedings, such as the administration of estates and actions to quiet title to real property. 1040 nr software The state designated the bar association's journal as the place to publish the required notices. 1040 nr software   The publication of ordinary commercial advertising does not advance the exempt purposes of the association even when published in a periodical that contains material related to exempt purposes. 1040 nr software Although the advertising is directed specifically to members of the legal profession, it is still commercial in nature and does not contribute importantly to the exempt purposes of the association. 1040 nr software Therefore, the advertising income is unrelated trade or business income. 1040 nr software   On the other hand, the publication of legal notices is distinguishable from ordinary commercial advertising in that its purpose is to inform the general public of significant legal events rather than to stimulate demand for the products or services of an advertiser. 1040 nr software This promotes the common interests of the legal profession and contributes importantly to the association's exempt purposes. 1040 nr software Therefore, the publishing of legal notices does not constitute an unrelated trade or business. 1040 nr software Museum greeting card sales. 1040 nr software    An art museum that exhibits modern art sells greeting cards that display printed reproductions of selected works from other art collections. 1040 nr software Each card is imprinted with the name of the artist, the title or subject matter of the work, the date or period of its creation, if known, and the museum's name. 1040 nr software The cards contain appropriate greetings and are personalized on request. 1040 nr software   The organization sells the cards in the shop it operates in the museum and sells them at quantity discounts to retail stores. 1040 nr software It also sells them by mail order through a catalog that is advertised in magazines and other publications throughout the year. 1040 nr software As a result, a large number of cards are sold at a significant profit. 1040 nr software   The museum is exempt as an educational organization on the basis of its ownership, maintenance, and exhibition for public viewing of works of art. 1040 nr software The sale of greeting cards with printed reproductions of artworks contributes importantly to the achievement of the museum's exempt educational purposes by enhancing public awareness, interest, and appreciation of art. 1040 nr software The cards may encourage more people to visit the museum itself to share in its educational programs. 1040 nr software The fact that the cards are promoted and sold in a commercial manner at a profit and in competition with commercial greeting card publishers does not alter the fact that the activity is related to the museum's exempt purpose. 1040 nr software Therefore, these sales activities are not an unrelated trade or business. 1040 nr software Museum shop. 1040 nr software   An art museum maintained and operated for the exhibition of American folk art operates a shop in the museum that sells: Reproductions of works in the museum's own collection and reproductions of artistic works from the collections of other art museums (prints suitable for framing, postcards, greeting cards, and slides); Metal, wood, and ceramic copies of American folk art objects from its own collection and similar copies of art objects from other collections of artworks; Instructional literature and scientific books and souvenir items concerning the history and development of art and, in particular, of American folk art; and Scientific books and souvenir items of the city in which the museum is located. 1040 nr software   The shop also rents originals or reproductions of paintings contained in its collection. 1040 nr software All of its reproductions are imprinted with the name of the artist, the title or subject matter of the work from which it is reproduced, and the museum's name. 1040 nr software   Each line of merchandise must be considered separately to determine if sales are related to the exempt purpose. 1040 nr software   The sale and rental of reproductions and copies of works from the museum's own collection and reproductions of artistic works not owned by the museum contribute importantly to the achievement of the museum's exempt educational purpose by making works of art familiar to a broader segment of the public, thereby enhancing the public's understanding and appreciation of art. 1040 nr software The same is true for the sale of literature relating to art. 1040 nr software Therefore, these sales activities are not an unrelated trade or business. 1040 nr software   On the other hand, the sale of scientific books and souvenir items of the city where the museum is located has no causal relationship to art or to artistic endeavor and, therefore, does not contribute importantly to the accomplishment of the museum's exempt educational purposes. 1040 nr software The fact that selling some of these items could, under different circumstances, be held related to the exempt educational purpose of some other exempt educational organization does not change this conclusion. 1040 nr software Additionally, the sale of these items does not lose its identity as a trade or business merely because the museum also sells articles which do contribute importantly to the accomplishment of its exempt function. 1040 nr software Therefore, these sales are an unrelated trade or business. 1040 nr software Business league's parking and bus services. 1040 nr software   A business league, whose purpose is to retain and stimulate trade in a downtown area that has inadequate parking facilities, operates a fringe parking lot and shuttle bus service. 1040 nr software It also operates, as an insubstantial part of its activities, a park and shop plan. 1040 nr software   The fringe parking lot and shuttle bus service operate in a manner that does not favor any individual or group of downtown merchants. 1040 nr software The merchants cannot offer free or discount parking or bus fares to their customers. 1040 nr software   The park and shop plan allows customers of particular merchants to park free at certain parking lots in the area. 1040 nr software Merchants participating in this plan buy parking stamps, which they distribute to their customers to use to pay for parking. 1040 nr software   Operating the fringe parking lot and shuttle bus service provides easy and convenient access to the downtown area and, therefore, stimulates and improves business conditions in the downtown area generally. 1040 nr software That activity contributes importantly to the organization's accomplishing its exempt purpose and is not an unrelated trade or business. 1040 nr software   The park and shop plan encourages customers to use a limited number of participating member merchants in order to obtain free parking. 1040 nr software This provides a particular service to individual members of the organization and does not further its exempt purpose. 1040 nr software Therefore, operating the park and shop plan is an unrelated trade or business. 1040 nr software Youth residence. 1040 nr software   An exempt organization, whose purpose is to provide for the welfare of young people, rents rooms primarily to people under age 25. 1040 nr software The residence units are operated on, and as a part of, the premises in which the organization carries on the social, recreational, and guidance programs for which it was recognized as exempt. 1040 nr software The facilities are under the management and supervision of trained career professionals who provide residents with personal counseling, physical education programs, and group recreational activities. 1040 nr software The rentals are not an unrelated trade or business because renting the rooms is substantially related to the organization's exempt purpose. 1040 nr software Health club program. 1040 nr software   An exempt charitable organization's purpose is to provide for the welfare of young people. 1040 nr software The organization conducts charitable activities and maintains facilities that will contribute to the physical, social, mental, and spiritual health of young people at minimum or no cost to them. 1040 nr software Nominal annual dues are charged for membership in the organization and use of the facilities. 1040 nr software   In addition, the organization organized a health club program that its members could join for an annual fee in addition to the annual dues. 1040 nr software The annual fee is comparable to fees charged by similar local commercial health clubs and is sufficiently high to restrict participation in the program to a limited number of members of the community. 1040 nr software   The health club program is in addition to the general physical fitness program of the organization. 1040 nr software Operating this program does not contribute importantly to the organization's accomplishing its exempt purpose and, therefore, is an unrelated trade or business. 1040 nr software Miniature golf course. 1040 nr software   An exempt youth welfare organization operates a miniature golf course that is open to the general public. 1040 nr software The course, which is managed by salaried employees, is substantially similar to commercial courses. 1040 nr software The admission fees charged are comparable to fees of commercial facilities and are designed to return a profit. 1040 nr software   The operation of the miniature golf course in a commercial manner does not contribute importantly to the accomplishment of the organization's exempt purpose and, therefore, is an unrelated trade or business. 1040 nr software Sales of hearing aids. 1040 nr software   A tax-exempt hospital, whose primary activity is rehabilitation, sells hearing aids to patients. 1040 nr software This activity is an essential part of the hospital's program to test and evaluate patients with hearing deficiencies and contributes importantly to its exempt purpose. 1040 nr software It is not an unrelated trade or business. 1040 nr software Nonpatient laboratory testing. 1040 nr software   Nonpatient laboratory testing performed by a tax-exempt teaching hospital on specimens needed for the conduct of its teaching activities is not an unrelated trade or business. 1040 nr software However, laboratory testing performed by a tax-exempt non-teaching hospital on referred specimens from private office patients of staff physicians is an unrelated trade or business if these services are otherwise available in the community. 1040 nr software Selling endorsements. 1040 nr software   An exempt scientific organization enjoys an excellent reputation in the field of biological research. 1040 nr software It exploits this reputation regularly by selling endorsements of laboratory equipment to manufacturers. 1040 nr software Endorsing laboratory equipment does not contribute importantly to the accomplishment of any purpose for which exemption is granted to the organization. 1040 nr software Accordingly, the sale of endorsements is an unrelated trade or business. 1040 nr software Sponsoring entertainment events. 1040 nr software   An exempt university has a regular faculty and a regularly enrolled student body. 1040 nr software During the school year, the university sponsors the appearance of professional theater companies and symphony orchestras that present drama and musical performances for the students and faculty members. 1040 nr software Members of the general public also are admitted. 1040 nr software The university advertises these performances and supervises advance ticket sales at various places, including such university facilities as the cafeteria and the university bookstore. 1040 nr software Although the presentation of the performances makes use of an intangible generated by the university's exempt educational functions—the presence of the student body and faculty—such drama and music events contribute importantly to the overall educational and cultural functions of the university. 1040 nr software Therefore, the activity is not an unrelated trade or business. 1040 nr software Excluded Trade or Business Activities The following activities are specifically excluded from the definition of unrelated trade or business. 1040 nr software Volunteer workforce. 1040 nr software   Any trade or business in which substantially all the work is performed for the organization without compensation is not an unrelated trade or business. 1040 nr software Example 1. 1040 nr software A retail store operated by an exempt orphanage where unpaid volunteers perform substantially all the work in carrying on the business is not an unrelated trade or business. 1040 nr software Example 2. 1040 nr software A volunteer fire company conducts weekly public dances. 1040 nr software Holding public dances and charging admission on a regular basis may, given the facts and circumstances of a particular case, be considered an unrelated trade or business. 1040 nr software However, because the work at the dances is performed by unpaid volunteers, the activity is not an unrelated trade or business. 1040 nr software Convenience of members. 1040 nr software   A trade or business conducted by a 501(c)(3) organization or by a governmental college or university primarily for the convenience of its members, students, patients, officers, or employees is not an unrelated trade or business. 1040 nr software For example, a laundry operated by a college for the purpose of laundering dormitory linens and students' clothing is not an unrelated trade or business. 1040 nr software Qualified sponsorship activities. 1040 nr software   Soliciting and receiving qualified sponsorship payments is not an unrelated trade or business, and the payments are not subject to unrelated business income tax. 1040 nr software Qualified sponsorship payment. 1040 nr software   This is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization's activities. 1040 nr software “Use or acknowledgment” does not include advertising the sponsor's products or services. 1040 nr software The organization's activities include all its activities, whether or not related to its exempt purposes. 1040 nr software   For example, if, in return for receiving a sponsorship payment, an organization promises to use the sponsor's name or logo in acknowledging the sponsor's support for an educational or fundraising event, the payment is a qualified sponsorship payment and is not subject to the unrelated business income tax. 1040 nr software   Providing facilities, services, or other privileges (for example, complimentary tickets, pro-am playing spots in golf tournaments, or receptions for major donors) to a sponsor or the sponsor's designees in connection with a sponsorship payment does not affect whether the payment is a qualified sponsorship payment. 1040 nr software Instead, providing these goods or services is treated as a separate transaction in determining whether the organization has unrelated business income from the event. 1040 nr software Generally, if the services or facilities are not a substantial benefit or if providing them is a related business activity, the payments will not be subject to the unrelated business income tax. 1040 nr software   Similarly, the sponsor's receipt of a license to use an intangible asset (for example, a trademark, logo, or designation) of the organization is treated as separate from the qualified sponsorship transaction in determining whether the organization has unrelated business taxable income. 1040 nr software   If part of a payment would be a qualified sponsorship payment if paid separately, that part is treated as a separate payment. 1040 nr software For example, if a sponsorship payment entitles the sponsor to both product advertising and the use or acknowledgment of the sponsor's name or logo by the organization, then the unrelated business income tax does not apply to the part of the payment that is more than the fair market value of the product advertising. 1040 nr software Advertising. 1040 nr software   A payment is not a qualified sponsorship payment if, in return, the organization advertises the sponsor's products or services. 1040 nr software For information on the treatment of payments for advertising, see Exploitation of Exempt Activity—Advertising Sales in chapter 4. 1040 nr software   Advertising includes: Messages containing qualitative or comparative language, price information, or other indications of savings or value; Endorsements; and Inducements to purchase, sell, or use the products or services. 1040 nr software   The use of promotional logos or slogans that are an established part of the sponsor's identity is not, by itself, advertising. 1040 nr software In addition, mere distribution or display of a sponsor's product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising. 1040 nr software Exception for contingent payments. 1040 nr software   A payment is not a qualified sponsorship payment if its amount is contingent, by contract or otherwise, upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events. 1040 nr software However, the fact that a sponsorship payment is contingent upon an event actually taking place or being broadcast does not, by itself, affect whether a payment qualifies. 1040 nr software Exception for periodicals. 1040 nr software   A payment is not a qualified sponsorship payment if it entitles the payer to the use or acknowledgment of the business name, logo, or product lines in the organization's periodical. 1040 nr software For this purpose, a periodical is any regularly scheduled and printed material (for example, a monthly journal) published by or on behalf of the organization. 1040 nr software It does not include material that is related to and primarily distributed in connection with a specific event conducted by the organization (for example, a program or brochure distributed at a sponsored event). 1040 nr software   The treatment of payments that entitle the payer to the depiction of the payer's name, logo, or products lines in an organization's periodical is determined under the rules that apply to advertising activities. 1040 nr software See Sales of advertising space under Examples, earlier in this chapter. 1040 nr software Also see Exploitation of Exempt Activity—Advertising Sales in chapter 4. 1040 nr software Exception for conventions and trade shows. 1040 nr software   A payment is not a qualified sponsorship payment if it is made in connection with any qualified convention or trade show activity. 1040 nr software The exclusion of qualified convention or trade show activities from the definition of unrelated trade or business is explained later under Convention or trade show activity. 1040 nr software Selling donated merchandise. 1040 nr software   A trade or business that consists of selling merchandise, substantially all of which the organization received as gifts or contributions, is not an unrelated trade or business. 1040 nr software For example, a thrift shop operated by a tax-exempt organization that sells donated clothes and books to the general public, with the proceeds going to the exempt organization, is not an unrelated trade or business. 1040 nr software Employee association sales. 1040 nr software   The sale of certain items by a local association of employees described in section 501(c)(4), organized before May 17, 1969, is not an unrelated trade or business if the items are sold for the convenience of the association's members at their usual place of employment. 1040 nr software This exclusion applies only to the sale of work-related clothes and equipment and items normally sold through vending machines, food dispensing facilities, or by snack bars. 1040 nr software Bingo games. 1040 nr software   Certain bingo games are not included in the term “unrelated trade or business. 1040 nr software ” To qualify for this exclusion, the bingo game must meet the following requirements. 1040 nr software It meets the legal definition of bingo. 1040 nr software It is legal where it is played. 1040 nr software It is played in a jurisdiction where bingo games are not regularly conducted by for-profit organizations. 1040 nr software Legal definition. 1040 nr software   For a game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game. 1040 nr software   A wagering game that does not meet the legal definition of bingo does not qualify for the exclusion, regardless of its name. 1040 nr software For example, “instant bingo,” in which a player buys a pre-packaged bingo card with pull-tabs that the player removes to determine if he or she is a winner, does not qualify. 1040 nr software Legal where played. 1040 nr software   This exclusion applies only if bingo is legal under the laws of the jurisdiction where it is conducted. 1040 nr software The fact that a jurisdiction's law that prohibits bingo is rarely enforced or is widely disregarded does not make the conduct of bingo legal for this purpose. 1040 nr software No for-profit games where played. 1040 nr software   This exclusion applies only if for-profit organizations cannot regularly conduct bingo games in any part of the same jurisdiction. 1040 nr software Jurisdiction is normally the entire state; however, in certain situations, local jurisdiction will control. 1040 nr software Example. 1040 nr software Tax-exempt organizations X and Y are organized under the laws of state N, which has a law that permits exempt organizations to conduct bingo games. 1040 nr software In addition, for-profit organizations are permitted to conduct bingo games in city S, a resort community located in county R. 1040 nr software Several for-profit organizations conduct nightly games. 1040 nr software Y conducts weekly bingo games in city S, while X conducts weekly games in county R. 1040 nr software Since state law confines the for-profit organizations to city S, local jurisdiction controls. 1040 nr software Y's bingo games conducted in city S are an unrelated trade or business. 1040 nr software However, X's bingo games conducted in county R outside of city S are not an unrelated trade or business. 1040 nr software Gambling activities other than bingo. 1040 nr software   Any game of chance conducted by an exempt organization in North Dakota is not an unrelated trade or business if conducting the game does not violate any state or local law. 1040 nr software Pole rentals. 1040 nr software   The term unrelated trade or business does not include qualified pole rentals by a mutual or cooperative telephone or electric company described in section 501(c)(12). 1040 nr software A qualified pole rental is the rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that the company uses in providing telephone or electric services to its members, and According to the rental, to support one or more wires (in addition to the wires described in 1 ) for use in connection with the transmission by wire of electricity or of telephone or other communications. 1040 nr software For this purpose, the term rental includes any sale of the right to use the pole (or other structure). 1040 nr software Distribution of low cost articles. 1040 nr software   The term unrelated trade or business does not include activities relating to the distribution of low cost articles incidental to soliciting charitable contributions. 1040 nr software This applies to organizations described in section 501 that are eligible to receive charitable contributions. 1040 nr software   A distribution is considered incidental to the solicitation of a charitable contribution if: The recipient did not request the distribution, The distribution is made without the express consent of the recipient, and The article is accompanied by a request for a charitable contribution to the organization and a statement that the recipient may keep the low cost article regardless of whether a contribution is made. 1040 nr software   An article is considered low cost if the cost of an item (or the aggregate costs if more than one item) distributed to a single recipient in a tax year is not more than $5, indexed annually for inflation. 1040 nr software The maximum cost of a low cost article is $9. 1040 nr software 70 for 2011. 1040 nr software The cost of an article is the cost to the organization that distributes the item or on whose behalf it is distributed. 1040 nr software Exchange or rental of member lists. 1040 nr software   The exchange or rental of member or donor lists between organizations described in section 501 that are eligible to receive charitable contributions is not included in the term unrelated trade or business. 1040 nr software Hospital services. 1040 nr software   The providing of certain services at or below cost by an exempt hospital to other exempt hospitals that have facilities for 100 or fewer inpatients is not an unrelated trade or business. 1040 nr software This exclusion applies only to services described in section 501(e)(1)(A). 1040 nr software Public entertainment activity. 1040 nr software   An unrelated trade or business does not include a qualified public entertainment activity. 1040 nr software A public entertainment activity is one traditionally conducted at a fair or exposition promoting agriculture and education, including any activity whose purpose is designed to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. 1040 nr software   A qualified public entertainment activity is one conducted by a qualifying organization: In conjunction with an international, national, state, regional, or local fair or exposition; In accordance with state law that permits the activity to be operated or conducted solely by such an organization or by an agency, instrumentality, or political subdivision of the state; or In accordance with state law that permits an organization to be granted a license to conduct an activity for not more than 20 days on paying the state a lower percentage of the revenue from the activity than the state charges nonqualifying organizations that hold similar activities. 1040 nr software   For these purposes, a qualifying organization is an organization described in section 501(c)(3), 501(c)(4), or 501(c)(5) that regularly conducts an agricultural and educational fair or exposition as one of its substantial exempt purposes. 1040 nr software Its conducting qualified public entertainment activities will not affect determination of its exempt status. 1040 nr software Convention or trade show activity. 1040 nr software   An unrelated trade or business does not include qualified convention or trade show activities conducted at a convention, annual meeting, or trade show. 1040 nr software   A qualified convention or trade show activity is any activity of a kind traditionally conducted by a qualifying organization in conjunction with an international, national, state, regional, or local convention, annual meeting, or show if: One of the purposes of the organization in sponsoring the activity is promoting and stimulating interest in, and demand for, the products and services of that industry or educating the persons in attendance regarding new products and services or new rules and regulations affecting the industry; and The show is designed to achieve its purpose through the character of the exhibits and the extent of the industry products that are displayed. 1040 nr software   For these purposes, a qualifying organization is one described in section 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6). 1040 nr software The organization must regularly conduct, as one of its substantial exempt purposes, a qualified convention or trade show activity. 1040 nr software   The rental of display space to exhibitors (including exhibitors who are suppliers) at a qualified convention or trade show is not an unrelated trade or business even if the exhibitors who rent the space are permitted to sell or solicit orders. 1040 nr software For this purpose, a supplier's exhibit is one in which the exhibitor displays goods or services that are supplied to, rather than by, members of the qualifying organization in the conduct of these members' own trades or businesses. 1040 nr software    Certain Internet activities conducted by a trade association described in section 501(c)(6) will be considered qualified convention and trade show activity if conducted on a special supplementary section of the association's website in conjunction with a trade show conducted by the association. 1040 nr software The trade show itself must be a qualified convention and trade show activity. 1040 nr software The supplementary section of the website must be ancillary to, and serve to augment and enhance, the trade show, as when it makes available the same information available at the trade show and is available only during a time period that coincides with the time period that the trade show is in operation. 1040 nr software Conversely, Internet activities that are not conducted in conjunction with a qualified convention and trade show activity and that do not augment and enhance the trade show cannot themselves be qualified convention and trade show activity. 1040 nr software Prev  Up  Next   Home   More Online Publications
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1040 nr software Publication 907 - Main Content Table of Contents IncomeDependent Care Benefits Social Security and Railroad Retirement Benefits Disability Pensions Military and Government Disability Pensions Other Payments Itemized DeductionsMedical Expenses Impairment-Related Work Expenses Tax CreditsChild and Dependent Care Credit Credit for the Elderly or the Disabled Earned Income Credit Household Employers Business Tax Incentives How To Get Tax Help Income All income is taxable unless it is specifically excluded by law. 1040 nr software The following discussions highlight some income items (both taxable and nontaxable) that are of particular interest to people with disabilities and those who care for people with disabilities. 1040 nr software Dependent Care Benefits Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person(s) while you worked, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. 1040 nr software Exclusion or deduction. 1040 nr software   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. 1040 nr software Your employer can tell you whether your benefit plan qualifies. 1040 nr software To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. 1040 nr software You cannot use Form 1040EZ. 1040 nr software   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. 1040 nr software Therefore, you would not get an exclusion from wages. 1040 nr software Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. 1040 nr software To claim the deduction, you must use Form 2441. 1040 nr software   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). 1040 nr software Statement for employee. 1040 nr software   Your employer must give you a Form W-2 (or similar statement), showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. 1040 nr software Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. 1040 nr software Qualifying person(s). 1040 nr software   A qualifying person is: A qualifying child who is under age 13 whom you can claim as a dependent. 1040 nr software If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13. 1040 nr software Your disabled spouse who is not physically or mentally able to care for himself or herself. 1040 nr software Any disabled person who was not physically or mentally able to care for himself or herself whom you can claim as a dependent (or could claim as a dependent except that the person had gross income of $3,900 or more or filed a joint return). 1040 nr software Any disabled person who was not physically or mentally able to care for himself or herself whom you could claim as a dependent except that you (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's 2013 return. 1040 nr software For information about excluding benefits on Form 1040, Form 1040NR, or Form 1040A, see Form 2441 and its instructions. 1040 nr software Social Security and Railroad Retirement Benefits If you received social security or equivalent Tier 1 railroad retirement (RRTA) benefits during the year, part of the amount you received may be taxable. 1040 nr software Are any of your benefits taxable?   If the only income you received during the year was your social security or equivalent Tier 1 railroad retirement (RRTA) benefits, your benefits generally are not taxable. 1040 nr software   If you received income during the year in addition to social security or equivalent Tier 1 railroad retirement (RRTA) benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. 1040 nr software   For more information, see the instructions for Form 1040, lines 20a and 20b, or Form 1040A, lines 14a and 14b. 1040 nr software Publication 915, Social Security and Equivalent Railroad Retirement Benefits, contains more detailed information. 1040 nr software Supplemental security income (SSI) payments. 1040 nr software   Social security benefits do not include SSI payments, which are not taxable. 1040 nr software Do not include these payments in your income. 1040 nr software Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. 1040 nr software You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. 1040 nr software Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. 1040 nr software You may be entitled to a tax credit if you were permanently and totally disabled when you retired. 1040 nr software For information on this credit, see Publication 524, Credit for the Elderly or the Disabled. 1040 nr software Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. 1040 nr software Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. 1040 nr software For more information on pensions and annuities, see Publication 575, Pension and Annuity Income. 1040 nr software Retirement and profit-sharing plans. 1040 nr software   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. 1040 nr software The payments must be reported as a pension or annuity. 1040 nr software Accrued leave payment. 1040 nr software   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. 1040 nr software The payment is not a disability payment. 1040 nr software Include it in your income in the tax year you receive it. 1040 nr software See Publication 525, Taxable and Nontaxable Income, for more information. 1040 nr software Military and Government Disability Pensions Generally, you must report disability pensions as income, but do not include certain military and government disability pensions. 1040 nr software For information about military and government disability pensions, see Publication 525. 1040 nr software VA disability benefits. 1040 nr software   Do not include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. 1040 nr software If you are a military retiree and do not receive your disability benefits from the VA, see Publication 525 for more information. 1040 nr software   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. 1040 nr software These include: Education, training, and subsistence allowances, Disability compensation and pension payments for disabilities paid either to veterans or their families, Grants for homes designed for wheelchair living, Grants for motor vehicles for veterans who lost their sight or the use of their limbs, Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death, Interest on insurance dividends left on deposit with the VA, Benefits under a dependent-care assistance program, The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001, or Payments made under the VA's compensated work therapy program. 1040 nr software Other Payments You may receive other payments that are related to your disability. 1040 nr software The following payments are not taxable. 1040 nr software Benefit payments from a public welfare fund, such as payments due to blindness. 1040 nr software Workers' compensation for an occupational sickness or injury if paid under a workers' compensation act or similar law. 1040 nr software Compensatory (but not punitive) damages for physical injury or physical sickness. 1040 nr software Disability benefits under a “no-fault” car insurance policy for loss of income or earning capacity as a result of injuries. 1040 nr software Compensation for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. 1040 nr software Long-Term Care Insurance Long-term care insurance contracts generally are treated as accident and health insurance contracts. 1040 nr software Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. 1040 nr software More detailed information can be found in Publication 525. 1040 nr software Accelerated Death Benefits You can exclude from income accelerated death benefits you receive on the life of an insured individual if certain requirements are met. 1040 nr software Accelerated death benefits are amounts received under a life insurance contract before the death of the insured. 1040 nr software These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. 1040 nr software This exclusion applies only if the insured was a terminally ill individual or a chronically ill individual. 1040 nr software For more information, see Publication 525. 1040 nr software Itemized Deductions If you file Form 1040, you generally can either claim the standard deduction or itemize your deductions. 1040 nr software You must use Schedule A (Form 1040) to itemize your deductions. 1040 nr software See your form instructions for information on the standard deduction and the deductions you can itemize. 1040 nr software The following discussions highlight some itemized deductions that are of particular interest to persons with disabilities. 1040 nr software Medical Expenses When figuring your deduction for medical expenses, you can generally include medical and dental expenses you pay for yourself, your spouse, and your dependents. 1040 nr software Medical expenses are the cost of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part or function of the body. 1040 nr software They include the costs of equipment, supplies, diagnostic devices, and transportation for needed medical care and payments for medical insurance. 1040 nr software You can deduct only the amount of your medical and dental expenses that is more than 10% (7. 1040 nr software 5% if either you or your spouse was born before January 2, 1949) of your adjusted gross income shown on Form 1040, line 38. 1040 nr software The following list highlights some of the medical expenses you can include in figuring your medical expense deduction. 1040 nr software For more detailed information, see Publication 502, Medical and Dental Expenses (Including the Health Coverage Tax Credit). 1040 nr software Artificial limbs, contact lenses, eyeglasses, and hearing aids. 1040 nr software The part of the cost of Braille books and magazines that is more than the price of regular printed editions. 1040 nr software Cost and repair of special telephone equipment for hearing-impaired persons. 1040 nr software Cost and maintenance of a wheelchair or a three-wheel motor vehicle commercially known as an “autoette. 1040 nr software ” Cost and care of a guide dog or other animal aiding a person with a physical disability. 1040 nr software Costs for a school that furnishes special education if a principal reason for using the school is its resources for relieving a mental or physical disability. 1040 nr software This includes the cost of teaching Braille and lip reading and the cost of remedial language training to correct a condition caused by a birth defect. 1040 nr software Premiums for qualified long-term care insurance, up to certain amounts. 1040 nr software Improvements to a home that do not increase its value if the main purpose is medical care. 1040 nr software An example is constructing entrance or exit ramps. 1040 nr software Improvements that increase a home's value, if the main purpose is medical care, may be partly included as a medical expense. 1040 nr software See Publication 502 for more information. 1040 nr software Impairment-Related Work Expenses If you are disabled, you can take a business deduction for expenses that are necessary for you to be able to work. 1040 nr software If you take a business deduction for these impairment-related work expenses, they are not subject to the 10% (7. 1040 nr software 5% if you or your spouse is age 65 or older) limit that applies to medical expenses. 1040 nr software You are disabled if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (including, but not limited to, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. 1040 nr software Impairment-related expenses defined. 1040 nr software   Impairment-related expenses are those ordinary and necessary business expenses that are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. 1040 nr software Publication 502 contains more detailed information. 1040 nr software Tax Credits This discussion highlights three tax credits that may be of interest to people with disabilities and those who care for people with disabilities. 1040 nr software Child and Dependent Care Credit If you pay someone to care for either your dependent under age 13 or your spouse or dependent who is not able to care for himself or herself, you may be able to get a credit of up to 35% of your expenses. 1040 nr software To qualify, you must pay these expenses so you can work or look for work. 1040 nr software The care must be provided for: Your qualifying child who is your dependent and who was under age 13 when the care was provided, Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040 nr software You can claim the credit on Form 1040 or 1040A. 1040 nr software You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. 1040 nr software You figure the credit on Form 2441. 1040 nr software For more information, see the instructions for Form 1040, line 48, or Form 1040A, line 29. 1040 nr software Publication 503, Child and Dependent Care Expenses, contains more detailed information. 1040 nr software Credit for the Elderly or the Disabled You may be able to claim this credit if you are a U. 1040 nr software S. 1040 nr software citizen or a resident alien and either of the following apply. 1040 nr software You were 65 or older at the end of 2013, You were under 65 at the end of 2013, and retired on permanent or total disability. 1040 nr software You can claim the credit on Form 1040 or 1040A. 1040 nr software You figure the credit on Schedule R. 1040 nr software For more information, see the instructions for Form 1040, line 53, or Form 1040A, line 30. 1040 nr software Publication 524, Credit for the Elderly or the Disabled, contains more detailed information. 1040 nr software Earned Income Credit This credit is based on the amount of your earned income. 1040 nr software You can get the credit if your adjusted gross income for 2013 is less than: $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, or $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children. 1040 nr software To figure the credit, use the worksheet in the instructions for Form 1040, 1040A, or 1040EZ. 1040 nr software If you have a qualifying child, also complete Schedule EIC, Earned Income Credit, and attach it to your Form 1040 or 1040A. 1040 nr software You cannot use Form 1040EZ if you have a qualifying child. 1040 nr software Qualifying child. 1040 nr software   To be a qualifying child, your child must be younger than you (or your spouse if married filing jointly) and under age 19 or a full-time student under age 24 at the end of 2013, or permanently and totally disabled at any time during 2013, regardless of age. 1040 nr software Earned income. 1040 nr software   If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. 1040 nr software However, payments you received from a disability insurance policy that you paid the premiums for are not earned income. 1040 nr software More information. 1040 nr software   For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040, line 64a; Form 1040A, line 38a; or Form 1040EZ, line 8a. 1040 nr software Publication 596, Earned Income Credit (EIC), contains more detailed information. 1040 nr software Household Employers If you pay someone to work in your home, such as a babysitter or housekeeper, you may be a household employer who has to pay employment taxes. 1040 nr software A person you hire through an agency is not your employee if the agency controls what work is done and how it is done. 1040 nr software This control could include setting the fee, requiring regular reports, and providing rules of conduct and appearance. 1040 nr software In this case you do not have to pay employment taxes on the amount you pay. 1040 nr software But if you control what work is done and how it is done, the worker is your employee. 1040 nr software If you possess the right to discharge a worker, that worker is generally considered to be your employee. 1040 nr software If a worker is your employee, it does not matter that you hired the worker through an agency or from a list provided by an agency. 1040 nr software To find out if you have to pay employment taxes, see Publication 926, Household Employer's Tax Guide For Wages Paid in 2013. 1040 nr software Business Tax Incentives If you own or operate a business, or you are looking for work, you should be aware of the following tax incentives for businesses to help persons with disabilities. 1040 nr software Deduction for costs of removing barriers to the disabled and the elderly—This is a deduction a business can take for making a facility or public transportation vehicle more accessible to and usable by persons who are disabled or elderly. 1040 nr software For more information, see chapter 7 of Publication 535, Business Expenses. 1040 nr software Disabled access credit—This is a nonrefundable tax credit for an eligible small business that pays or incurs expenses to provide access to persons with disabilities. 1040 nr software The expenses must be to enable the eligible small business to comply with the Americans With Disabilities Act of 1990. 1040 nr software See Form 8826, Disabled Access Credit, for more information. 1040 nr software Work opportunity credit—This credit provides businesses with an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. 1040 nr software One targeted group consists of vocational rehabilitation referrals. 1040 nr software These are individuals who have a physical or mental disability that results in a substantial handicap to employment. 1040 nr software See Form 5884, Work Opportunity Credit. 1040 nr software How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. 1040 nr software Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. 1040 nr software Free help with your tax return. 1040 nr software   Free help in preparing your return is available nationwide from IRS-certified volunteers. 1040 nr software The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. 1040 nr software The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040 nr software Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040 nr software Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. 1040 nr software To find the nearest VITA or TCE site, visit IRS. 1040 nr software gov or call 1-800-906-9887. 1040 nr software   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040 nr software To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040 nr software aarp. 1040 nr software org/money/taxaide or call 1-888-227-7669. 1040 nr software   For more information on these programs, go to IRS. 1040 nr software gov and enter “VITA” in the search box. 1040 nr software Internet. 1040 nr software IRS. 1040 nr software gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. 1040 nr software Apply for an Employer Identification Number (EIN). 1040 nr software Go to IRS. 1040 nr software gov and enter Apply for an EIN in the search box. 1040 nr software Request an Electronic Filing PIN by going to IRS. 1040 nr software gov and entering Electronic Filing PIN in the search box. 1040 nr software Check the status of your 2013 refund with Where's My Refund? Go to IRS. 1040 nr software gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040 nr software If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040 nr software Check the status of your amended return. 1040 nr software Go to IRS. 1040 nr software gov and enter Where's My Amended Return in the search box. 1040 nr software Download forms, instructions, and publications, including some accessible versions. 1040 nr software Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. 1040 nr software gov or IRS2Go. 1040 nr software Tax return and tax account transcripts are generally available for the current year and past three years. 1040 nr software Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040 nr software gov. 1040 nr software Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1040 nr software Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040 nr software gov. 1040 nr software Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. 1040 nr software gov or IRS2Go. 1040 nr software Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. 1040 nr software An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. 1040 nr software Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 1040 nr software If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. 1040 nr software Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040 nr software Locate the nearest volunteer help site with the VITA Locator Tool on IRS. 1040 nr software gov. 1040 nr software Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040 nr software The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040 nr software Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. 1040 nr software AARP offers the Tax-Aide counseling program as part of the TCE program. 1040 nr software Visit AARP's website to find the nearest Tax-Aide location. 1040 nr software Research your tax questions. 1040 nr software Search publications and instructions by topic or keyword. 1040 nr software Read the Internal Revenue Code, regulations, or other official guidance. 1040 nr software Read Internal Revenue Bulletins. 1040 nr software Sign up to receive local and national tax news by email. 1040 nr software Phone. 1040 nr software You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040 nr software Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 1040 nr software Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040 nr software Call to locate the nearest volunteer help site, 1-800-906-9887. 1040 nr software Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040 nr software The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040 nr software Most VITA and TCE sites offer free electronic filing. 1040 nr software Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040 nr software Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040 nr software Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. 1040 nr software The automated Where's My Refund? information is available 24 hours a day, 7 days a week. 1040 nr software If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040 nr software Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040 nr software Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040 nr software Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. 1040 nr software Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1040 nr software Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). 1040 nr software You should receive your order within 10 business days. 1040 nr software Call to order transcripts of your tax returns or tax account, 1-800-908-9946. 1040 nr software Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. 1040 nr software Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. 1040 nr software Call to ask tax questions, 1-800-829-1040. 1040 nr software Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040 nr software The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040 nr software These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. 1040 nr software gsa. 1040 nr software gov/fedrelay. 1040 nr software Walk-in. 1040 nr software You can find a selection of forms, publications and services — in-person, face-to-face. 1040 nr software Products. 1040 nr software You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040 nr software Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040 nr software Services. 1040 nr software You can walk in to your local TAC most business days for personal, face-to-face tax help. 1040 nr software An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040 nr software If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. 1040 nr software No appointment is necessary—just walk in. 1040 nr software Before visiting, check www. 1040 nr software irs. 1040 nr software gov/localcontacts for hours of operation and services provided. 1040 nr software Mail. 1040 nr software You can send your order for forms, instructions, and publications to the address below. 1040 nr software You should receive a response within 10 business days after your request is received. 1040 nr software  Internal Revenue Service 1201 N. 1040 nr software Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. 1040 nr software   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040 nr software Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040 nr software What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. 1040 nr software We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1040 nr software You face (or your business is facing) an immediate threat of adverse action. 1040 nr software You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040 nr software   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1040 nr software Here's why we can help: TAS is an independent organization within the IRS. 1040 nr software Our advocates know how to work with the IRS. 1040 nr software Our services are free and tailored to meet your needs. 1040 nr software We have offices in every state, the District of Columbia, and Puerto Rico. 1040 nr software How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1040 nr software irs. 1040 nr software gov/advocate, or call us toll-free at 1-877-777-4778. 1040 nr software How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040 nr software If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040 nr software irs. 1040 nr software gov/sams. 1040 nr software Low Income Taxpayer Clinics. 1040 nr software   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. 1040 nr software Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040 nr software Visit www. 1040 nr software TaxpayerAdvocate. 1040 nr software irs. 1040 nr software gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040 nr software Prev  Up  Next   Home   More Online Publications