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1040ez Tax Form 2013

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1040ez Tax Form 2013

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

Federally Funded Research and Development Center (FFRDC) - contract is available for task order issuance for all Treasury Bureaus as well as other Government Agencies (upon approval by the IRS Contracting Officer). The focus of this technical support is for Total Enterprise Modernization in the areas of: 1) Strategic Management, 2) Procurement (Support & Evaluation), 3) Program and Project Management, 4) Technical Management, and 5) Evaluation and Audit (includes IV&V).

Land Mobile Radio (LMR) Subscriber Unit - contracts provide standards-based and standards-compliant LMR equipment to enable communications interoperability with similarly configured equipment. The TIA/EIA-102 suite of standards, also know as Project 25, provides the basis for the required LMR technical specifications.

Prime Modernization (TIRNO-99-D-00001) - This is an indefinite Delivery/Indefinite Quantity (IDIQ) type contract under which Cost Reimbursement, Time and Materials (T&M), Fixed Price, and Performance Based Task Orders may be issued.

Prime Contract Outreach Information - IRS Small Business Program Office from time to time hosts a Prime Contract Network Opportunity Session. The purpose of these events are to assist small businesses in meeting with the IRS Prime and Alliance partners to discuss potential subcontracting opportunities available under the IRS Prime Systems Integration Contract.

Treasury Commercial Vehicles (TCV) - Blanket Purchase Agreements are a series of acquisition vehicles structured to provide commercial-off-the shelf products for the IRS and Treasury bureaus. Six (6) BPA's were established to better serve our customers. TCV is available for use by any employee of the Treasury Department or any of its bureaus. The BPA's are very flexible with items regularly added to meet specific needs.

Total Information Processing Support Services (TIPSS-4) - Discover more about the wide spectrum of Information Technology services that TIPSS-4 offers. Included you will find guidance, and useful information to help you acquire the right services to support your program goals and objectives.


Questions about the Procurement information on this site, please contact the webmaster. Contact the Office of Procurement for other Procurement related questions.

Page Last Reviewed or Updated: 09-Sep-2013

The 1040ez Tax Form 2013

1040ez tax form 2013 22. 1040ez tax form 2013   Taxes Table of Contents IntroductionIndian tribal government. 1040ez tax form 2013 Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. 1040ez tax form 2013 Real Estate TaxesReal estate taxes for prior years. 1040ez tax form 2013 Examples. 1040ez tax form 2013 Form 1099-S. 1040ez tax form 2013 Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). 1040ez tax form 2013 It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. 1040ez tax form 2013 This chapter covers the following topics. 1040ez tax form 2013 Income taxes (federal, state, local, and foreign). 1040ez tax form 2013 General sales taxes (state and local). 1040ez tax form 2013 Real estate taxes (state, local, and foreign). 1040ez tax form 2013 Personal property taxes (state and local). 1040ez tax form 2013 Taxes and fees you cannot deduct. 1040ez tax form 2013 Use Table 22-1 as a guide to determine which taxes you can deduct. 1040ez tax form 2013 The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. 1040ez tax form 2013 Business taxes. 1040ez tax form 2013   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. 1040ez tax form 2013 For information on these taxes, see Publication 535, Business Expenses. 1040ez tax form 2013 State or local taxes. 1040ez tax form 2013   These are taxes imposed by the 50 states, U. 1040ez tax form 2013 S. 1040ez tax form 2013 possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. 1040ez tax form 2013 Indian tribal government. 1040ez tax form 2013   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. 1040ez tax form 2013 Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. 1040ez tax form 2013 General sales taxes. 1040ez tax form 2013   These are taxes imposed at one rate on retail sales of a broad range of classes of items. 1040ez tax form 2013 Foreign taxes. 1040ez tax form 2013   These are taxes imposed by a foreign country or any of its political subdivisions. 1040ez tax form 2013 Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. 1040ez tax form 2013 The tax must be imposed on you. 1040ez tax form 2013 You must pay the tax during your tax year. 1040ez tax form 2013 The tax must be imposed on you. 1040ez tax form 2013   In general, you can deduct only taxes imposed on you. 1040ez tax form 2013   Generally, you can deduct property taxes only if you are an owner of the property. 1040ez tax form 2013 If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. 1040ez tax form 2013 You must pay the tax during your tax year. 1040ez tax form 2013   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. 1040ez tax form 2013 If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. 1040ez tax form 2013 If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. 1040ez tax form 2013 If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). 1040ez tax form 2013 See Publication 538, Accounting Periods and Methods, for details. 1040ez tax form 2013    If you use an accrual method of accounting, see Publication 538 for more information. 1040ez tax form 2013 Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. 1040ez tax form 2013 State and Local Income Taxes You can deduct state and local income taxes. 1040ez tax form 2013 However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. 1040ez tax form 2013 See General Sales Taxes , later. 1040ez tax form 2013 Exception. 1040ez tax form 2013    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. 1040ez tax form 2013 For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. 1040ez tax form 2013 What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. 1040ez tax form 2013 Withheld taxes. 1040ez tax form 2013   You can deduct state and local income taxes withheld from your salary in the year they are withheld. 1040ez tax form 2013 Your Form(s) W-2 will show these amounts. 1040ez tax form 2013 Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. 1040ez tax form 2013 Estimated tax payments. 1040ez tax form 2013   You can deduct estimated tax payments you made during the year to a state or local government. 1040ez tax form 2013 However, you must have a reasonable basis for making the estimated tax payments. 1040ez tax form 2013 Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. 1040ez tax form 2013 For example, you made an estimated state income tax payment. 1040ez tax form 2013 However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. 1040ez tax form 2013 You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. 1040ez tax form 2013 Refund applied to taxes. 1040ez tax form 2013   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. 1040ez tax form 2013    Do not reduce your deduction by either of the following items. 1040ez tax form 2013 Any state or local income tax refund (or credit) you expect to receive for 2013. 1040ez tax form 2013 Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. 1040ez tax form 2013   However, part or all of this refund (or credit) may be taxable. 1040ez tax form 2013 See Refund (or credit) of state or local income taxes , later. 1040ez tax form 2013 Separate federal returns. 1040ez tax form 2013   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. 1040ez tax form 2013 Joint state and local returns. 1040ez tax form 2013   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. 1040ez tax form 2013 You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. 1040ez tax form 2013 However, you cannot deduct more than the amount you actually paid during the year. 1040ez tax form 2013 You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. 1040ez tax form 2013 If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. 1040ez tax form 2013 Joint federal return. 1040ez tax form 2013   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. 1040ez tax form 2013 Contributions to state benefit funds. 1040ez tax form 2013    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. 1040ez tax form 2013 For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. 1040ez tax form 2013 Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. 1040ez tax form 2013 Alaska Unemployment Compensation Fund. 1040ez tax form 2013 California Nonoccupational Disability Benefit Fund. 1040ez tax form 2013 New Jersey Nonoccupational Disability Benefit Fund. 1040ez tax form 2013 New Jersey Unemployment Compensation Fund. 1040ez tax form 2013 New York Nonoccupational Disability Benefit Fund. 1040ez tax form 2013 Pennsylvania Unemployment Compensation Fund. 1040ez tax form 2013 Rhode Island Temporary Disability Benefit Fund. 1040ez tax form 2013 Washington State Supplemental Workmen's Compensation Fund. 1040ez tax form 2013    Employee contributions to private or voluntary disability plans are not deductible. 1040ez tax form 2013 Refund (or credit) of state or local income taxes. 1040ez tax form 2013   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. 1040ez tax form 2013 This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. 1040ez tax form 2013 If you did not itemize your deductions in the previous year, do not include the refund in income. 1040ez tax form 2013 If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. 1040ez tax form 2013 For a discussion of how much to include, see Recoveries in chapter 12. 1040ez tax form 2013 Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. 1040ez tax form 2013 S. 1040ez tax form 2013 possession. 1040ez tax form 2013 However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. 1040ez tax form 2013 S. 1040ez tax form 2013 tax under the foreign earned income exclusion or the foreign housing exclusion. 1040ez tax form 2013 For information on these exclusions, see Publication 54, Tax Guide for U. 1040ez tax form 2013 S. 1040ez tax form 2013 Citizens and Resident Aliens Abroad. 1040ez tax form 2013 For information on the foreign tax credit, see Publication 514. 1040ez tax form 2013 General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. 1040ez tax form 2013 You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. 1040ez tax form 2013 Actual expenses. 1040ez tax form 2013   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. 1040ez tax form 2013 However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. 1040ez tax form 2013 If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. 1040ez tax form 2013 If you use the actual expenses method, you must have receipts to show the general sales taxes paid. 1040ez tax form 2013 Do not include sales taxes paid on items used in your trade or business. 1040ez tax form 2013 Motor vehicles. 1040ez tax form 2013   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. 1040ez tax form 2013 This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. 1040ez tax form 2013 Optional sales tax tables. 1040ez tax form 2013   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). 1040ez tax form 2013 You may also be able to add the state and local general sales taxes paid on certain specified items. 1040ez tax form 2013   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. 1040ez tax form 2013 Your income is your adjusted gross income plus any nontaxable items such as the following. 1040ez tax form 2013 Tax-exempt interest. 1040ez tax form 2013 Veterans' benefits. 1040ez tax form 2013 Nontaxable combat pay. 1040ez tax form 2013 Workers' compensation. 1040ez tax form 2013 Nontaxable part of social security and railroad retirement benefits. 1040ez tax form 2013 Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. 1040ez tax form 2013 Public assistance payments. 1040ez tax form 2013 If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. 1040ez tax form 2013 See the Instructions for Schedule A (Form 1040), line 5, for details. 1040ez tax form 2013 Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. 1040ez tax form 2013 You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. 1040ez tax form 2013 Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. 1040ez tax form 2013 They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. 1040ez tax form 2013 For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. 1040ez tax form 2013 Tenant-shareholders in a cooperative housing corporation. 1040ez tax form 2013   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. 1040ez tax form 2013 The corporation should provide you with a statement showing your share of the taxes. 1040ez tax form 2013 For more information, see Special Rules for Cooperatives in Publication 530. 1040ez tax form 2013 Division of real estate taxes between buyers and sellers. 1040ez tax form 2013   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. 1040ez tax form 2013   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. 1040ez tax form 2013 The seller is treated as paying the taxes up to, but not including, the date of sale. 1040ez tax form 2013 The buyer is treated as paying the taxes beginning with the date of sale. 1040ez tax form 2013 This applies regardless of the lien dates under local law. 1040ez tax form 2013 Generally, this information is included on the settlement statement provided at the closing. 1040ez tax form 2013    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. 1040ez tax form 2013 This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. 1040ez tax form 2013 However, you must also include the amount of that tax in the selling price of the property. 1040ez tax form 2013 The buyer must include the same amount in his or her cost of the property. 1040ez tax form 2013   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. 1040ez tax form 2013 Worksheet 22-1. 1040ez tax form 2013 Figuring Your Real Estate Tax Deduction 1. 1040ez tax form 2013 Enter the total real estate taxes for the real property tax year   2. 1040ez tax form 2013 Enter the number of days in the real property tax year that you owned the property   3. 1040ez tax form 2013 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 1040ez tax form 2013 4. 1040ez tax form 2013 Multiply line 1 by line 3. 1040ez tax form 2013 This is your deduction. 1040ez tax form 2013 Enter it on Schedule A (Form 1040), line 6   Note. 1040ez tax form 2013 Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. 1040ez tax form 2013 Your total deduction is the sum of the line 4 amounts for all of the properties. 1040ez tax form 2013 Real estate taxes for prior years. 1040ez tax form 2013   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. 1040ez tax form 2013 Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. 1040ez tax form 2013 The buyer must add them to the cost of the property. 1040ez tax form 2013 The seller can deduct these taxes paid by the buyer. 1040ez tax form 2013 However, the seller must include them in the selling price. 1040ez tax form 2013 Examples. 1040ez tax form 2013   The following examples illustrate how real estate taxes are divided between buyer and seller. 1040ez tax form 2013 Example 1. 1040ez tax form 2013 Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. 1040ez tax form 2013 The tax on their old home, sold on May 7, was $620. 1040ez tax form 2013 The tax on their new home, bought on May 3, was $732. 1040ez tax form 2013 Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. 1040ez tax form 2013 On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. 1040ez tax form 2013 Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). 1040ez tax form 2013 They figure their deduction for taxes on their old home as follows. 1040ez tax form 2013 Worksheet 22-1. 1040ez tax form 2013 Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. 1040ez tax form 2013 Enter the total real estate taxes for the real property tax year $620 2. 1040ez tax form 2013 Enter the number of days in the real property tax year that you owned the property 126 3. 1040ez tax form 2013 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 1040ez tax form 2013 3452 4. 1040ez tax form 2013 Multiply line 1 by line 3. 1040ez tax form 2013 This is your deduction. 1040ez tax form 2013 Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. 1040ez tax form 2013 (The buyers add the $214 to their cost of the home. 1040ez tax form 2013 ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). 1040ez tax form 2013 They figure their deduction for taxes on their new home as follows. 1040ez tax form 2013 Worksheet 22-1. 1040ez tax form 2013 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. 1040ez tax form 2013 Enter the total real estate taxes for the real property tax year $732 2. 1040ez tax form 2013 Enter the number of days in the real property tax year that you owned the property 243 3. 1040ez tax form 2013 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 1040ez tax form 2013 6658 4. 1040ez tax form 2013 Multiply line 1 by line 3. 1040ez tax form 2013 This is your deduction. 1040ez tax form 2013 Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. 1040ez tax form 2013 (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. 1040ez tax form 2013 ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. 1040ez tax form 2013 They will enter this amount on Schedule A (Form 1040), line 6. 1040ez tax form 2013 Example 2. 1040ez tax form 2013 George and Helen Brown bought a new home on May 3, 2013. 1040ez tax form 2013 Their real property tax year for the new home is the calendar year. 1040ez tax form 2013 Real estate taxes for 2012 were assessed in their state on January 1, 2013. 1040ez tax form 2013 The taxes became due on May 31, 2013, and October 31, 2013. 1040ez tax form 2013 The Browns agreed to pay all taxes due after the date of purchase. 1040ez tax form 2013 Real estate taxes for 2012 were $680. 1040ez tax form 2013 They paid $340 on May 31, 2013, and $340 on October 31, 2013. 1040ez tax form 2013 These taxes were for the 2012 real property tax year. 1040ez tax form 2013 The Browns cannot deduct them since they did not own the property until 2013. 1040ez tax form 2013 Instead, they must add $680 to the cost of their new home. 1040ez tax form 2013 In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. 1040ez tax form 2013 The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). 1040ez tax form 2013 They will figure their 2014 deduction for taxes as follows. 1040ez tax form 2013 Worksheet 22-1. 1040ez tax form 2013 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. 1040ez tax form 2013 Enter the total real estate taxes for the real property tax year $752 2. 1040ez tax form 2013 Enter the number of days in the real property tax year that you owned the property 243 3. 1040ez tax form 2013 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 1040ez tax form 2013 6658 4. 1040ez tax form 2013 Multiply line 1 by line 3. 1040ez tax form 2013 This is your deduction. 1040ez tax form 2013 Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. 1040ez tax form 2013 Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. 1040ez tax form 2013 This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. 1040ez tax form 2013 The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. 1040ez tax form 2013 The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. 1040ez tax form 2013 Form 1099-S. 1040ez tax form 2013   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. 1040ez tax form 2013 Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. 1040ez tax form 2013 The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. 1040ez tax form 2013   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. 1040ez tax form 2013 The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. 1040ez tax form 2013 See Refund (or rebate) , later. 1040ez tax form 2013 Taxes placed in escrow. 1040ez tax form 2013   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. 1040ez tax form 2013 You can deduct only the real estate tax that the third party actually paid to the taxing authority. 1040ez tax form 2013 If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. 1040ez tax form 2013 Tenants by the entirety. 1040ez tax form 2013   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. 1040ez tax form 2013 Divorced individuals. 1040ez tax form 2013   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. 1040ez tax form 2013 See Taxes and insurance in chapter 18 for more information. 1040ez tax form 2013 Ministers' and military housing allowances. 1040ez tax form 2013   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. 1040ez tax form 2013 Refund (or rebate). 1040ez tax form 2013   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. 1040ez tax form 2013 If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. 1040ez tax form 2013 However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. 1040ez tax form 2013 For more information, see Recoveries in chapter 12. 1040ez tax form 2013 Table 22-1. 1040ez tax form 2013 Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. 1040ez tax form 2013 Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). 1040ez tax form 2013     Fines and penalties. 1040ez tax form 2013 Income Taxes State and local income taxes. 1040ez tax form 2013 Federal income taxes. 1040ez tax form 2013   Foreign income taxes. 1040ez tax form 2013     Employee contributions to state funds listed under Contributions to state benefit funds . 1040ez tax form 2013 Employee contributions to private or voluntary disability plans. 1040ez tax form 2013     State and local general sales taxes if you choose to deduct state and local income taxes. 1040ez tax form 2013 General Sales Taxes State and local general sales taxes, including compensating use taxes. 1040ez tax form 2013 State and local income taxes if you choose to deduct state and local general sales taxes. 1040ez tax form 2013 Other Taxes Taxes that are expenses of your trade or business. 1040ez tax form 2013 Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. 1040ez tax form 2013   Taxes on property producing rent or royalty income. 1040ez tax form 2013 Per capita taxes. 1040ez tax form 2013   Occupational taxes. 1040ez tax form 2013 See chapter 28. 1040ez tax form 2013     One-half of self-employment tax paid. 1040ez tax form 2013   Personal Property Taxes State and local personal property taxes. 1040ez tax form 2013 Customs duties that are not expenses of your trade or business or of producing income. 1040ez tax form 2013 Real Estate Taxes State and local real estate taxes. 1040ez tax form 2013 Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). 1040ez tax form 2013   Foreign real estate taxes. 1040ez tax form 2013 Taxes for local benefits (with exceptions). 1040ez tax form 2013 See Real Estate-Related Items You Cannot Deduct . 1040ez tax form 2013   Tenant's share of real estate taxes paid by  cooperative housing corporation. 1040ez tax form 2013 Trash and garbage pickup fees (with exceptions). 1040ez tax form 2013 See Real Estate-Related Items You Cannot Deduct . 1040ez tax form 2013     Rent increase due to higher real estate taxes. 1040ez tax form 2013     Homeowners' association charges. 1040ez tax form 2013 Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. 1040ez tax form 2013 Taxes for local benefits. 1040ez tax form 2013 Itemized charges for services (such as trash and garbage pickup fees). 1040ez tax form 2013 Transfer taxes (or stamp taxes). 1040ez tax form 2013 Rent increases due to higher real estate taxes. 1040ez tax form 2013 Homeowners' association charges. 1040ez tax form 2013 Taxes for local benefits. 1040ez tax form 2013   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. 1040ez tax form 2013 These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. 1040ez tax form 2013 You should increase the basis of your property by the amount of the assessment. 1040ez tax form 2013   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. 1040ez tax form 2013 If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. 1040ez tax form 2013 If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. 1040ez tax form 2013    Taxes for local benefits may be included in your real estate tax bill. 1040ez tax form 2013 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. 1040ez tax form 2013 You should use the rules above to determine if the local benefit tax is deductible. 1040ez tax form 2013 Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. 1040ez tax form 2013 Itemized charges for services. 1040ez tax form 2013    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. 1040ez tax form 2013 For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). 1040ez tax form 2013    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. 1040ez tax form 2013 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. 1040ez tax form 2013 Exception. 1040ez tax form 2013   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. 1040ez tax form 2013 Transfer taxes (or stamp taxes). 1040ez tax form 2013   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. 1040ez tax form 2013 If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. 1040ez tax form 2013 If paid by the buyer, they are included in the cost basis of the property. 1040ez tax form 2013 Rent increase due to higher real estate taxes. 1040ez tax form 2013   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. 1040ez tax form 2013 Homeowners' association charges. 1040ez tax form 2013   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. 1040ez tax form 2013 Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. 1040ez tax form 2013 A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. 1040ez tax form 2013 For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. 1040ez tax form 2013 If the tax is partly based on value and partly based on other criteria, it may qualify in part. 1040ez tax form 2013 Example. 1040ez tax form 2013 Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. 1040ez tax form 2013 You paid $32 based on the value ($1,500) and weight (3,400 lbs. 1040ez tax form 2013 ) of your car. 1040ez tax form 2013 You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. 1040ez tax form 2013 The remaining $17 ($. 1040ez tax form 2013 50 × 34), based on the weight, is not deductible. 1040ez tax form 2013 Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. 1040ez tax form 2013 Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. 1040ez tax form 2013 See Table 22-1. 1040ez tax form 2013 Taxes and fees that are generally not deductible include the following items. 1040ez tax form 2013 Employment taxes. 1040ez tax form 2013 This includes social security, Medicare, and railroad retirement taxes withheld from your pay. 1040ez tax form 2013 However, one-half of self-employment tax you pay is deductible. 1040ez tax form 2013 In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. 1040ez tax form 2013 For more information, see chapters 21 and 32. 1040ez tax form 2013 Estate, inheritance, legacy, or succession taxes. 1040ez tax form 2013 However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. 1040ez tax form 2013 In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. 1040ez tax form 2013 For more information, see Publication 559, Survivors, Executors, and Administrators. 1040ez tax form 2013 Federal income taxes. 1040ez tax form 2013 This includes income taxes withheld from your pay. 1040ez tax form 2013 Fines and penalties. 1040ez tax form 2013 You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. 1040ez tax form 2013 Gift taxes. 1040ez tax form 2013 License fees. 1040ez tax form 2013 You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). 1040ez tax form 2013 Per capita taxes. 1040ez tax form 2013 You cannot deduct state or local per capita taxes. 1040ez tax form 2013 Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. 1040ez tax form 2013 For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. 1040ez tax form 2013 Where To Deduct You deduct taxes on the following schedules. 1040ez tax form 2013 State and local income taxes. 1040ez tax form 2013    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. 1040ez tax form 2013 Check box a on line 5. 1040ez tax form 2013 General sales taxes. 1040ez tax form 2013   Sales taxes are deducted on Schedule A (Form 1040), line 5. 1040ez tax form 2013 You must check box b on line 5. 1040ez tax form 2013 If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. 1040ez tax form 2013 Foreign income taxes. 1040ez tax form 2013   Generally, income taxes you pay to a foreign country or U. 1040ez tax form 2013 S. 1040ez tax form 2013 possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. 1040ez tax form 2013 S. 1040ez tax form 2013 income tax on Form 1040, line 47. 1040ez tax form 2013 To claim the credit, you may have to complete and attach Form 1116. 1040ez tax form 2013 For more information, see chapter 37, the Form 1040 instructions, or Publication 514. 1040ez tax form 2013 Real estate taxes and personal property taxes. 1040ez tax form 2013    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). 1040ez tax form 2013 Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). 1040ez tax form 2013 Self-employment tax. 1040ez tax form 2013    Deduct one-half of your self-employment tax on Form 1040, line 27. 1040ez tax form 2013 Other taxes. 1040ez tax form 2013    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. 1040ez tax form 2013 Prev  Up  Next   Home   More Online Publications