Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

1040ez Tax Forms 2013

Website Can I Efile Past Year Tax ReturnsHow To Amend My 2011 Tax ReturnHow To Amend Tax ReturnFree Income Tax Filing 2012File Tax ReturnH&r Block Online TaxCan I Still E File My 2012 Tax ReturnFree Tax Filing For Low IncomeHow Do I File An Amended Federal Tax Return2009 Amended Tax Return2010Download A 1040ez Federal Tax FormE File 1040ezElderly Filing Income TaxMilitary Pay TaxesIrs FormsFree 2012 State Tax FilingCan I File 2011 Tax Return OnlineForm 1040ez InstructionsH&r Block Free TaxesHow Do I File An Amended Tax Return For 20091040ez2012How To Do An Amendment On My Tax ReturnFile 1040xMy Pay Gov1040nr EfileHow To File Amended Tax ReturnIrs Tax Form 1040 EzHow Do I File An Amended Tax ReturnWhere Can I File My 2012 Taxes OnlineFile 1040x Electronically2011 Free Tax Software1040x Form 2013Www Gov Freefile1040aCan I File A 1040x OnlineFree Federal And Free State Tax FilingPrint Free 2010 1040ez Tax FormIrs Form 1040ez 2010Form 1040-ez 2013

1040ez Tax Forms 2013

1040ez tax forms 2013 Publication 503 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. 1040ez tax forms 2013 Tax questions. 1040ez tax forms 2013 Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 503, such as legislation enacted after it was published, go to www. 1040ez tax forms 2013 irs. 1040ez tax forms 2013 gov/pub503. 1040ez tax forms 2013 Reminders Taxpayer identification number needed for each qualifying person. 1040ez tax forms 2013  You must include on line 2 of Form 2441, Child and Dependent Care Expenses, the name and taxpayer identification number (generally the social security number) of each qualifying person. 1040ez tax forms 2013 See Taxpayer identification number under Qualifying Person Test, later. 1040ez tax forms 2013 You may have to pay employment taxes. 1040ez tax forms 2013  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. 1040ez tax forms 2013 Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 1040ez tax forms 2013 See Employment Taxes for Household Employers, later. 1040ez tax forms 2013 Photographs of missing children. 1040ez tax forms 2013  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040ez tax forms 2013 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040ez tax forms 2013 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040ez tax forms 2013 Introduction This publication explains the tests you must meet to claim the credit for child and dependent care expenses. 1040ez tax forms 2013 It explains how to figure and claim the credit. 1040ez tax forms 2013 You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 1040ez tax forms 2013 The credit can be up to 35% of your expenses. 1040ez tax forms 2013 To qualify, you must pay these expenses so you can work or look for work. 1040ez tax forms 2013 This publication also discusses some of the employment tax rules for household employers. 1040ez tax forms 2013 Dependent care benefits. 1040ez tax forms 2013   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. 1040ez tax forms 2013 You must complete Form 2441, Part III, before you can figure the amount of your credit. 1040ez tax forms 2013 See Dependent Care Benefits under How To Figure the Credit, later. 1040ez tax forms 2013 Comments and suggestions. 1040ez tax forms 2013   We welcome your comments about this publication and your suggestions for future editions. 1040ez tax forms 2013   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040ez tax forms 2013 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040ez tax forms 2013 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040ez tax forms 2013   You can send your comments from www. 1040ez tax forms 2013 irs. 1040ez tax forms 2013 gov/formspubs/. 1040ez tax forms 2013 Click on “More Information” and then on “Comment on Tax Forms and Publications. 1040ez tax forms 2013 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040ez tax forms 2013 Ordering forms and publications. 1040ez tax forms 2013   Visit www. 1040ez tax forms 2013 irs. 1040ez tax forms 2013 gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040ez tax forms 2013 Internal Revenue Service 1201 N. 1040ez tax forms 2013 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040ez tax forms 2013   If you have a tax question, check the information available on IRS. 1040ez tax forms 2013 gov or call 1-800-829-1040. 1040ez tax forms 2013 We cannot answer tax questions sent to either of the above addresses. 1040ez tax forms 2013 Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-10 Dependent Care Provider's Identification and Certification See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. 1040ez tax forms 2013 Prev  Up  Next   Home   More Online Publications
Español

Managing Household Records

When was the last time you couldn't find an important paper you knew you had carefully put away? How do people decide where to store and keep such records? And how do they know what to keep, what to throw away, and when? Do you have a simple system or roadmap for important papers (PDF |download Adobe Reader) to which you or a loved one can refer to in case of an emergency?

Every household must work out its own records management system, but some general guidelines can help. A good system will provide an overview of what happens to property after a major life event occurs.

Active File

First, gather your important papers and important documents from throughout your home. Put these documents into three piles: an active file, dead storage, and items to discard or shred. The active file should include documents and financial records you deal with on a regular basis and need to refer to. Keep these readily accessible at home:

  • Appliance manuals, warranties and service contracts
  • Bank statements
  • Bill payment receipts
  • Bills awaiting payment
  • Credit card information
  • Education records, diploma, transcripts, etc.
  • Employment records
  • Family health records, including vaccination histories
  • Health benefit information
  • Household inventory
  • Income tax working papers
  • Insurance policies
  • Loan statements and payment books
  • Password list
  • Receipts for items under warranty
  • Safe deposit box inventory (and key)
  • Tax receipts, such as those received for charitable deductions


Dead Storage

All active file papers over 3-years-old are considered dead storage. This may not necessarily apply to everything—for example, appliance manuals that you use frequently should stay in the active file.

Items to Discard

  • Cancelled checks for cash or nondeductible expenses
  • Expired warranties
  • Pay stubs, after reconciling with W-2
  • Other records no longer needed, such as those that were replaced by newer versions, manuals of appliances that you've replaced, etc.
How Long to Keep Documents
Document How Long to Keep It
Bank statements 1 year, unless needed to support tax filings
Birth certificates, marriage licenses, divorce decrees, passports, education records, military service records Forever
Contracts Until updated
Credit card records Until paid, unless needed to support tax filings
Home purchase and improvement records As long as you own the property
Household inventory Forever; update as needed
Insurance, life Forever
Insurance, car, home, etc. Until you renew the policy
Investment statements Shred your monthly statements; keep annual statements until you sell the investments
Investment certificates Until you cash or sell the item
Loan documents Until you sell the item the loan was for
Real estate deeds As long as you own the property
Receipts for large purchases Until you sell or discard the item
Service contracts and warranties Until you sell or discard the item
Social Security card Forever
Social Security statement When you get your new statement online, shred the old one
Tax records 7 years from the filing date
Vehicle titles Until you sell or dispose of the car
Will Until updated

Create Your Filing System

Generally, your home file should include all the items you refer to frequently including bills, warranties, bank statements, etc. You’ll also need a secondary storage location for your more important, difficult to replace papers, such as passports, vehicle titles, birth certificates, etc. A fireproof/waterproof safe may be one possibility, but it's better to store those records in a location away from home, such as a bank safe deposit box.

Organize your home filing system (PDF | download Adobe Reader) in a way that you can understand and manage. Choose one member of your household as file manager who will take responsibility for keeping the filing up-to-date and consistent. However, in case of an emergency, everyone in the household needs to be familiar with the system, including children old enough to understand how to use it. Develop and stick to a regular filing and paperwork schedule to avoid having to deal with backlogged papers. A few minutes once or twice a week should be sufficient.

Consider scanning and storing some documents electronically since it's best to save your important documents and files in a way that can easily be carried away and accessed later. Scanning will give you easy access to your documents and allow you to transfer them via e-mail and easily make back-up copies. Investing in an external hard drive for your computer and regularly backing up important documents will allow you to carry away the external hard drive at a moment's notice.

If you don’t have the time or the desire to take these steps, or have realized that the task is too much to handle, consider asking a friend or family member to help you focus and give a fresh perspective. Or, you may want to consider hiring a professional organizer to provide structure, solutions, and systems, and help you gain a sense of control.

Safe Deposit Box

Once you have organized your documents, you’ll want to consider getting an off-site storage location, such as a safe deposit box. Use the safe deposit box for originals, but remember, you'll still need copies at home if something tragic should happen to you and your safe deposit box gets sealed. Always seal documents stored in a safe deposit box in airtight waterproof containers (like Ziploc bags) to ensure they don’t get damaged. If you'd rather keep your records at home, then get a fireproof/waterproof safe. A good rule of thumb is: Put documents in the box if you can't easily replace them or if you don't know what might happen if you don't have them.

If applicable, you should have official or certified copies of documents for your safe deposit box. "Official" means an original copy with all required signatures. Select documents, such as birth certificates, must also be certified or notarized to be considered valid. You can get most government records for free or at low cost from a government office or online at a government agency's website. If you are unsure whether you need a certified copy, or want more information about which local government office can give you originals of these documents, contact your local consumer protection office. Consult your attorney before you put an original copy of your will in a safe deposit box—some states don’t permit access after a person dies.

If you need to obtain documents regarding birth, death, marriage, or divorce, check out Where to Write for Vital Records for guidance. Be wary of companies that offer to sell you copies of official papers; you should check with the appropriate government agency to see if they will provide the same information free or at a lower price.

Consider keeping copies of the following documents in a safe deposit box or locked in a fireproof/waterproof safe in your home:

  • Adoption papers
  • Advance directives*
  • Birth and death certificates
  • Citizenship papers
  • Contracts of importance
  • Deeds and property titles
  • Household inventory
  • Life insurance policies
  • Marriage licenses and divorce decrees
  • Military discharge papers
  • Passports
  • Powers of attorney*
  • Social Security cards
  • Stock and bond certificates
  • Wills*

*Since the safe deposit box will be sealed at your death, keep a copy of your will somewhere accessible. The same goes for the advance directive and powers of attorney since you may not be able to give others access to the safe deposit box.

Grab and Go Kit for Emergencies

Disasters like floods, fires, earthquakes, and tornadoes strike without warning and can affect anyone. Your number one priority in these situations is making sure your family is safe—not finding your most recent copies of insurance policies or bank statements. An easy-to-grab emergency financial records kit (PDF | download Adobe Reader) will make sure you have access to important documents in case the unexpected happens to you.

What Documents Should You Have Ready?

Store the documents in an accordion file and keep it in your emergency supply kit so that everything you need is together. Items you should put in the kit include originals or copies of:

  • Birth and marriage certificates, divorce decrees
  • Social Security cards of household members
  • Driver's license and other wallet cards
  • Will and/or trust documents; powers of attorney
  • Recent income tax return
  • Passports and/or other identity documents
  • Military discharge papers
  • A list of your prescriptions: name of medication, dosage, pharmacy

Other important papers include:

  • Contacts for family members, employer, financial advisors, attorney, accountant, and banker
  • Insurance policy information
  • Bank, credit union, and credit card account list
  • Summary of personal, financial, property, and other vital information

Other items to consider including:

  • Safe deposit box keys and/or safe combination
  • Computer user names and passwords; CD with relevant personal, financial, legal files
  • Some emergency cash

Remember that these documents contain personal information like social security numbers and bank account information that could be used against you if it fell into the wrong hands. Be sure your emergency financial records kit is stored in a secure location in your home so it is easy for you to carry away in a disaster not for a thief to carry away in a robbery.

The 1040ez Tax Forms 2013

1040ez tax forms 2013 9. 1040ez tax forms 2013   Rental Income and Expenses Table of Contents Introduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. 1040ez tax forms 2013 Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. 1040ez tax forms 2013 Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. 1040ez tax forms 2013 Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) Introduction This chapter discusses rental income and expenses. 1040ez tax forms 2013 It also covers the following topics. 1040ez tax forms 2013 Personal use of dwelling unit (including vacation home). 1040ez tax forms 2013 Depreciation. 1040ez tax forms 2013 Limits on rental losses. 1040ez tax forms 2013 How to report your rental income and expenses. 1040ez tax forms 2013 If you sell or otherwise dispose of your rental property, see Publication 544, Sales and Other Dispositions of Assets. 1040ez tax forms 2013 If you have a loss from damage to, or theft of, rental property, see Publication 547, Casualties, Disasters, and Thefts. 1040ez tax forms 2013 If you rent a condominium or a cooperative apartment, some special rules apply to you even though you receive the same tax treatment as other owners of rental property. 1040ez tax forms 2013 See Publication 527, Residential Rental Property, for more information. 1040ez tax forms 2013 Useful Items - You may want to see: Publication 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 6251 Alternative Minimum Tax—Individuals 8582 Passive Activity Loss Limitations Schedule E (Form 1040) Supplemental Income and Loss Rental Income In most cases, you must include in your gross income all amounts you receive as rent. 1040ez tax forms 2013 Rental income is any payment you receive for the use or occupation of property. 1040ez tax forms 2013 In addition to amounts you receive as normal rent payments, there are other amounts that may be rental income. 1040ez tax forms 2013 When to report. 1040ez tax forms 2013   If you are a cash-basis taxpayer, you report rental income on your return for the year you actually or constructively receive it. 1040ez tax forms 2013 You are a cash-basis taxpayer if you report income in the year you receive it, regardless of when it was earned. 1040ez tax forms 2013 You constructively receive income when it is made available to you, for example, by being credited to your bank account. 1040ez tax forms 2013   For more information about when you constructively receive income, see Accounting Methods in chapter 1. 1040ez tax forms 2013 Advance rent. 1040ez tax forms 2013   Advance rent is any amount you receive before the period that it covers. 1040ez tax forms 2013 Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. 1040ez tax forms 2013 Example. 1040ez tax forms 2013 You sign a 10-year lease to rent your property. 1040ez tax forms 2013 In the first year, you receive $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. 1040ez tax forms 2013 You must include $10,000 in your income in the first year. 1040ez tax forms 2013 Canceling a lease. 1040ez tax forms 2013   If your tenant pays you to cancel a lease, the amount you receive is rent. 1040ez tax forms 2013 Include the payment in your income in the year you receive it regardless of your method of accounting. 1040ez tax forms 2013 Expenses paid by tenant. 1040ez tax forms 2013   If your tenant pays any of your expenses, the payments are rental income. 1040ez tax forms 2013 Because you must include this amount in income, you can deduct the expenses if they are deductible rental expenses. 1040ez tax forms 2013 See Rental Expenses , later, for more information. 1040ez tax forms 2013 Property or services. 1040ez tax forms 2013   If you receive property or services, instead of money, as rent, include the fair market value of the property or services in your rental income. 1040ez tax forms 2013   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. 1040ez tax forms 2013 Security deposits. 1040ez tax forms 2013   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. 1040ez tax forms 2013 But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. 1040ez tax forms 2013   If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. 1040ez tax forms 2013 Include it in your income when you receive it. 1040ez tax forms 2013 Part interest. 1040ez tax forms 2013   If you own a part interest in rental property, you must report your part of the rental income from the property. 1040ez tax forms 2013 Rental of property also used as your home. 1040ez tax forms 2013   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. 1040ez tax forms 2013 However, you can deduct on Schedule A (Form 1040) the interest, taxes, and casualty and theft losses that are allowed for nonrental property. 1040ez tax forms 2013 See Personal Use of Dwelling Unit (Including Vacation Home) , later. 1040ez tax forms 2013 Rental Expenses This part discusses expenses of renting property that you ordinarily can deduct from your rental income. 1040ez tax forms 2013 It includes information on the expenses you can deduct if you rent part of your property, or if you change your property to rental use. 1040ez tax forms 2013 Depreciation , which you can also deduct from your rental income, is discussed later. 1040ez tax forms 2013 Personal use of rental property. 1040ez tax forms 2013   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. 1040ez tax forms 2013 Also, your rental expense deductions may be limited. 1040ez tax forms 2013 See Personal Use of Dwelling Unit (Including Vacation Home) , later. 1040ez tax forms 2013 Part interest. 1040ez tax forms 2013   If you own a part interest in rental property, you can deduct expenses that you paid according to your percentage of ownership. 1040ez tax forms 2013 When to deduct. 1040ez tax forms 2013   If you are a cash-basis taxpayer, you generally deduct your rental expenses in the year you pay them. 1040ez tax forms 2013 Depreciation. 1040ez tax forms 2013   You can begin to depreciate rental property when it is ready and available for rent. 1040ez tax forms 2013 See Placed-in-Service under When Does Depreciation Begin and End in chapter 2 of Publication 527. 1040ez tax forms 2013 Pre-rental expenses. 1040ez tax forms 2013   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. 1040ez tax forms 2013 Uncollected rent. 1040ez tax forms 2013   If you are a cash-basis taxpayer, do not deduct uncollected rent. 1040ez tax forms 2013 Because you have not included it in your income, it is not deductible. 1040ez tax forms 2013 Vacant rental property. 1040ez tax forms 2013   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. 1040ez tax forms 2013 However, you cannot deduct any loss of rental income for the period the property is vacant. 1040ez tax forms 2013 Vacant while listed for sale. 1040ez tax forms 2013   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. 1040ez tax forms 2013 If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. 1040ez tax forms 2013 Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. 1040ez tax forms 2013 Improvements. 1040ez tax forms 2013   You must capitalize any expense you pay to improve your rental property. 1040ez tax forms 2013 An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. 1040ez tax forms 2013 Betterments. 1040ez tax forms 2013   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. 1040ez tax forms 2013 Restoration. 1040ez tax forms 2013   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. 1040ez tax forms 2013 Adaptation. 1040ez tax forms 2013   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. 1040ez tax forms 2013 Separate the costs of repairs and improvements, and keep accurate records. 1040ez tax forms 2013 You will need to know the cost of improvements when you sell or depreciate your property. 1040ez tax forms 2013 The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. 1040ez tax forms 2013 Other Expenses Other expenses you can deduct from your rental income include advertising, cleaning and maintenance, utilities, fire and liability insurance, taxes, interest, commissions for the collection of rent, ordinary and necessary travel and transportation, and other expenses, discussed next. 1040ez tax forms 2013 Insurance premiums paid in advance. 1040ez tax forms 2013   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. 1040ez tax forms 2013 You cannot deduct the total premium in the year you pay it. 1040ez tax forms 2013 Legal and other professional fees. 1040ez tax forms 2013   You can deduct, as a rental expense, legal and other professional expenses, such as tax return preparation fees you paid to prepare Schedule E (Form 1040), Part I. 1040ez tax forms 2013 For example, on your 2013 Schedule E, you can deduct fees paid in 2013 to prepare your 2012 Schedule E, Part I. 1040ez tax forms 2013 You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. 1040ez tax forms 2013 Local benefit taxes. 1040ez tax forms 2013   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. 1040ez tax forms 2013 These charges are nondepreciable capital expenditures, and must be added to the basis of your property. 1040ez tax forms 2013 However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. 1040ez tax forms 2013 Local transportation expenses. 1040ez tax forms 2013    You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. 1040ez tax forms 2013 However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. 1040ez tax forms 2013 See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. 1040ez tax forms 2013   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. 1040ez tax forms 2013 For 2013, the standard mileage rate for business use is 56. 1040ez tax forms 2013 5 cents per mile. 1040ez tax forms 2013 For more information, see chapter 26. 1040ez tax forms 2013    To deduct car expenses under either method, you must keep records that follow the rules in chapter 26. 1040ez tax forms 2013 In addition, you must complete Form 4562, Part V, and attach it to your tax return. 1040ez tax forms 2013 Rental of equipment. 1040ez tax forms 2013   You can deduct the rent you pay for equipment that you use for rental purposes. 1040ez tax forms 2013 However, in some cases, lease contracts are actually purchase contracts. 1040ez tax forms 2013 If so, you cannot deduct these payments. 1040ez tax forms 2013 You can recover the cost of purchased equipment through depreciation. 1040ez tax forms 2013 Rental of property. 1040ez tax forms 2013   You can deduct the rent you pay for property that you use for rental purposes. 1040ez tax forms 2013 If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. 1040ez tax forms 2013 Travel expenses. 1040ez tax forms 2013   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. 1040ez tax forms 2013 You must properly allocate your expenses between rental and nonrental activities. 1040ez tax forms 2013 You cannot deduct the cost of traveling away from home if the primary purpose of the trip was to improve your property. 1040ez tax forms 2013 You recover the cost of improvements by taking depreciation. 1040ez tax forms 2013 For information on travel expenses, see chapter 26. 1040ez tax forms 2013    To deduct travel expenses, you must keep records that follow the rules in chapter 26. 1040ez tax forms 2013   See Rental Expenses in Publication 527 for more information. 1040ez tax forms 2013 Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. 1040ez tax forms 2013 You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. 1040ez tax forms 2013 You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. 1040ez tax forms 2013 However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). 1040ez tax forms 2013 Example. 1040ez tax forms 2013 Your tax year is the calendar year. 1040ez tax forms 2013 You moved from your home in May and started renting it out on June 1. 1040ez tax forms 2013 You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. 1040ez tax forms 2013 Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. 1040ez tax forms 2013 Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. 1040ez tax forms 2013 You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). 1040ez tax forms 2013 You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity or painting the outside of your house. 1040ez tax forms 2013 There is no change in the types of expenses deductible for the personal-use part of your property. 1040ez tax forms 2013 Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). 1040ez tax forms 2013 You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. 1040ez tax forms 2013 You do not have to divide the expenses that belong only to the rental part of your property. 1040ez tax forms 2013 For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. 1040ez tax forms 2013 If you install a second phone line strictly for your tenants' use, all of the cost of the second line is deductible as a rental expense. 1040ez tax forms 2013 You can deduct depreciation, discussed later, on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. 1040ez tax forms 2013 How to divide expenses. 1040ez tax forms 2013   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between the rental use and the personal use. 1040ez tax forms 2013 You can use any reasonable method for dividing the expense. 1040ez tax forms 2013 It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. 1040ez tax forms 2013 The two most common methods for dividing an expense are based on (1) the number of rooms in your home, and (2) the square footage of your home. 1040ez tax forms 2013 Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. 1040ez tax forms 2013 You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. 1040ez tax forms 2013 For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. 1040ez tax forms 2013 Where to report. 1040ez tax forms 2013   Report your not-for-profit rental income on Form 1040, line 21. 1040ez tax forms 2013 For example, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. 1040ez tax forms 2013   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Form 1040, Schedule A, line 23. 1040ez tax forms 2013 You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. 1040ez tax forms 2013 Personal Use of Dwelling Unit (Including Vacation Home) If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. 1040ez tax forms 2013 In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. 1040ez tax forms 2013 Only your rental expenses may be deducted on Schedule E (Form 1040). 1040ez tax forms 2013 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). 1040ez tax forms 2013 You must also determine if the dwelling unit is considered a home. 1040ez tax forms 2013 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. 1040ez tax forms 2013 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. 1040ez tax forms 2013 There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. 1040ez tax forms 2013 Dwelling unit. 1040ez tax forms 2013   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. 1040ez tax forms 2013 It also includes all structures or other property belonging to the dwelling unit. 1040ez tax forms 2013 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. 1040ez tax forms 2013   A dwelling unit does not include property used solely as a hotel, motel, inn, or similar establishment. 1040ez tax forms 2013 Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. 1040ez tax forms 2013 Example. 1040ez tax forms 2013   You rent a room in your home that is always available for short-term occupancy by paying customers. 1040ez tax forms 2013 You do not use the room yourself, and you allow only paying customers to use the room. 1040ez tax forms 2013 The room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. 1040ez tax forms 2013 Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. 1040ez tax forms 2013 When dividing your expenses, follow these rules. 1040ez tax forms 2013 Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. 1040ez tax forms 2013 This rule does not apply when determining whether you used the unit as a home. 1040ez tax forms 2013 Any day that the unit is available for rent but not actually rented is not a day of rental use. 1040ez tax forms 2013 Example. 1040ez tax forms 2013 Your beach cottage was available for rent from June 1 through August 31 (92 days). 1040ez tax forms 2013 During that time, except for the first week in August (7 days) when you were unable to find a renter, you rented the cottage at a fair rental price. 1040ez tax forms 2013 The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. 1040ez tax forms 2013 Your family also used the cottage during the last 2 weeks of May (14 days). 1040ez tax forms 2013 The cottage was not used at all before May 17 or after August 31. 1040ez tax forms 2013 You figure the part of the cottage expenses to treat as rental expenses as follows. 1040ez tax forms 2013 The cottage was used for rental a total of 85 days (92 − 7). 1040ez tax forms 2013 The days it was available for rent but not rented (7 days) are not days of rental use. 1040ez tax forms 2013 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. 1040ez tax forms 2013 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). 1040ez tax forms 2013 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). 1040ez tax forms 2013 Your rental expenses are 85/99 (86%) of the cottage expenses. 1040ez tax forms 2013 Note. 1040ez tax forms 2013 When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. 1040ez tax forms 2013 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. 1040ez tax forms 2013 Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. 1040ez tax forms 2013 If you have a net loss, you may not be able to deduct all of the rental expenses. 1040ez tax forms 2013 See Dwelling Unit Used as a Home, next. 1040ez tax forms 2013 Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. 1040ez tax forms 2013 You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. 1040ez tax forms 2013 See What is a day of personal use , later. 1040ez tax forms 2013 Fair rental price. 1040ez tax forms 2013   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. 1040ez tax forms 2013 The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. 1040ez tax forms 2013   If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price, do not count that day as a day of rental use in applying (2) above. 1040ez tax forms 2013 Instead, count it as a day of personal use in applying both (1) and (2) above. 1040ez tax forms 2013 What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. 1040ez tax forms 2013 You or any other person who has an interest in the unit, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). 1040ez tax forms 2013 However, see Days used as a main home before or after renting , later. 1040ez tax forms 2013 A member of your family or a member of the family of any other person who owns an interest in the unit, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. 1040ez tax forms 2013 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. 1040ez tax forms 2013 ), and lineal descendants (children, grandchildren, etc. 1040ez tax forms 2013 ). 1040ez tax forms 2013 Anyone under an arrangement that lets you use some other dwelling unit. 1040ez tax forms 2013 Anyone at less than a fair rental price. 1040ez tax forms 2013 Main home. 1040ez tax forms 2013   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. 1040ez tax forms 2013 Shared equity financing agreement. 1040ez tax forms 2013   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. 1040ez tax forms 2013 Donation of use of property. 1040ez tax forms 2013   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. 1040ez tax forms 2013 Examples. 1040ez tax forms 2013   The following examples show how to determine days of personal use. 1040ez tax forms 2013 Example 1. 1040ez tax forms 2013 You and your neighbor are co-owners of a condominium at the beach. 1040ez tax forms 2013 Last year, you rented the unit to vacationers whenever possible. 1040ez tax forms 2013 The unit was not used as a main home by anyone. 1040ez tax forms 2013 Your neighbor used the unit for 2 weeks last year; you did not use it at all. 1040ez tax forms 2013 Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. 1040ez tax forms 2013 Example 2. 1040ez tax forms 2013 You and your neighbors are co-owners of a house under a shared equity financing agreement. 1040ez tax forms 2013 Your neighbors live in the house and pay you a fair rental price. 1040ez tax forms 2013 Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. 1040ez tax forms 2013 This is because your neighbors rent the house as their main home under a shared equity financing agreement. 1040ez tax forms 2013 Example 3. 1040ez tax forms 2013 You own a rental property that you rent to your son. 1040ez tax forms 2013 Your son does not own any interest in this property. 1040ez tax forms 2013 He uses it as his main home and pays you a fair rental price. 1040ez tax forms 2013 Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. 1040ez tax forms 2013 Example 4. 1040ez tax forms 2013 You rent your beach house to Joshua. 1040ez tax forms 2013 Joshua rents his cabin in the mountains to you. 1040ez tax forms 2013 You each pay a fair rental price. 1040ez tax forms 2013 You are using your house for personal purposes on the days that Joshua uses it because your house is used by Joshua under an arrangement that allows you to use his house. 1040ez tax forms 2013 Days used for repairs and maintenance. 1040ez tax forms 2013   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. 1040ez tax forms 2013 Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. 1040ez tax forms 2013 Days used as a main home before or after renting. 1040ez tax forms 2013   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. 1040ez tax forms 2013 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. 1040ez tax forms 2013 You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. 1040ez tax forms 2013 However, this special rule does not apply when dividing expenses between rental and personal use. 1040ez tax forms 2013 Examples. 1040ez tax forms 2013   The following examples show how to determine whether you used your rental property as a home. 1040ez tax forms 2013 Example 1. 1040ez tax forms 2013 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. 1040ez tax forms 2013 You rented the basement apartment at a fair rental price to college students during the regular school year. 1040ez tax forms 2013 You rented to them on a 9-month lease (273 days). 1040ez tax forms 2013 You figured 10% of the total days rented to others at a fair rental price is 27 days. 1040ez tax forms 2013 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. 1040ez tax forms 2013 Your basement apartment was used as a home because you used it for personal purposes for 30 days. 1040ez tax forms 2013 Rent-free use by your brothers is considered personal use. 1040ez tax forms 2013 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). 1040ez tax forms 2013 Example 2. 1040ez tax forms 2013 You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). 1040ez tax forms 2013 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. 1040ez tax forms 2013 You figured 10% of the total days rented to others at a fair rental price is 3 days. 1040ez tax forms 2013 The room was used as a home because you used it for personal purposes for 21 days. 1040ez tax forms 2013 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). 1040ez tax forms 2013 Example 3. 1040ez tax forms 2013 You own a condominium apartment in a resort area. 1040ez tax forms 2013 You rented it at a fair rental price for a total of 170 days during the year. 1040ez tax forms 2013 For 12 of those days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. 1040ez tax forms 2013 Your family actually used the apartment for 10 of those days. 1040ez tax forms 2013 Therefore, the apartment is treated as having been rented for 160 (170 − 10) days. 1040ez tax forms 2013 You figured 10% of the total days rented to others at a fair rental price is 16 days. 1040ez tax forms 2013 Your family also used the apartment for 7 other days during the year. 1040ez tax forms 2013 You used the apartment as a home because you used it for personal purposes for 17 days. 1040ez tax forms 2013 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). 1040ez tax forms 2013 Minimal rental use. 1040ez tax forms 2013   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. 1040ez tax forms 2013 See Used as a home but rented less than 15 days , later, for more information. 1040ez tax forms 2013 Limit on deductions. 1040ez tax forms 2013   Renting a dwelling unit that is considered a home is not a passive activity. 1040ez tax forms 2013 Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. 1040ez tax forms 2013 The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. 1040ez tax forms 2013 Any expenses carried forward to the next year will be subject to any limits that apply for that year. 1040ez tax forms 2013 This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. 1040ez tax forms 2013   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 9-1. 1040ez tax forms 2013 Reporting Income and Deductions Property not used for personal purposes. 1040ez tax forms 2013   If you do not use a dwelling unit for personal purposes, see How To Report Rental Income and Expenses , later, for how to report your rental income and expenses. 1040ez tax forms 2013 Property used for personal purposes. 1040ez tax forms 2013   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. 1040ez tax forms 2013 Not used as a home. 1040ez tax forms 2013   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. 1040ez tax forms 2013 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . 1040ez tax forms 2013 The expenses for personal use are not deductible as rental expenses. 1040ez tax forms 2013   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses , later. 1040ez tax forms 2013 Used as a home but rented less than 15 days. 1040ez tax forms 2013   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). 1040ez tax forms 2013 You are not required to report the rental income and rental expenses from this activity. 1040ez tax forms 2013 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). 1040ez tax forms 2013 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. 1040ez tax forms 2013 Used as a home and rented 15 days or more. 1040ez tax forms 2013   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. 1040ez tax forms 2013 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . 1040ez tax forms 2013 The expenses for personal use are not deductible as rental expenses. 1040ez tax forms 2013   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. 1040ez tax forms 2013 You do not need to use Worksheet 9-1. 1040ez tax forms 2013   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. 1040ez tax forms 2013 To figure your deductible rental expenses and any carryover to next year, use Worksheet 9-1. 1040ez tax forms 2013 Depreciation You recover the cost of income-producing property through yearly tax deductions. 1040ez tax forms 2013 You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 1040ez tax forms 2013 Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. 1040ez tax forms 2013 You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense. 1040ez tax forms 2013 You can deduct depreciation only on the part of your property used for rental purposes. 1040ez tax forms 2013 Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 1040ez tax forms 2013 You may have to use Form 4562 to figure and report your depreciation. 1040ez tax forms 2013 See How To Report Rental Income and Expenses , later. 1040ez tax forms 2013 Alternative minimum tax (AMT). 1040ez tax forms 2013    If you use accelerated depreciation, you may be subject to the AMT. 1040ez tax forms 2013 Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). 1040ez tax forms 2013 Claiming the correct amount of depreciation. 1040ez tax forms 2013   You should claim the correct amount of depreciation each tax year. 1040ez tax forms 2013 If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. 1040ez tax forms 2013   If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. 1040ez tax forms 2013 S Individual Income Tax Return. 1040ez tax forms 2013 If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. 1040ez tax forms 2013 See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information. 1040ez tax forms 2013 Changing your accounting method to deduct unclaimed depreciation. 1040ez tax forms 2013   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 1040ez tax forms 2013 In some instances, that consent is automatic. 1040ez tax forms 2013 For more information, see chapter 1 of Publication 946. 1040ez tax forms 2013 Land. 1040ez tax forms 2013   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 1040ez tax forms 2013 The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 1040ez tax forms 2013 More information. 1040ez tax forms 2013   See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation. 1040ez tax forms 2013 Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. 1040ez tax forms 2013 You must consider these rules in the order shown below. 1040ez tax forms 2013 At-risk rules. 1040ez tax forms 2013 These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. 1040ez tax forms 2013 This applies only if the real property was placed in service after 1986. 1040ez tax forms 2013 Passive activity limits. 1040ez tax forms 2013 Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. 1040ez tax forms 2013 However, there are exceptions. 1040ez tax forms 2013 At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. 1040ez tax forms 2013 Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. 1040ez tax forms 2013 In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. 1040ez tax forms 2013 You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. 1040ez tax forms 2013 See Publication 925 for more information. 1040ez tax forms 2013 Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. 1040ez tax forms 2013 For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. 1040ez tax forms 2013 Limits on passive activity deductions and credits. 1040ez tax forms 2013    Deductions or losses from passive activities are limited. 1040ez tax forms 2013 You generally cannot offset income, other than passive income, with losses from passive activities. 1040ez tax forms 2013 Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. 1040ez tax forms 2013 Any excess loss or credit is carried forward to the next tax year. 1040ez tax forms 2013   For a detailed discussion of these rules, see Publication 925. 1040ez tax forms 2013    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. 1040ez tax forms 2013 Real estate professionals. 1040ez tax forms 2013   Rental activities in which you materially participated during the year are not passive activities if, for that year, you were a real estate professional. 1040ez tax forms 2013 For a detailed discussion of the requirements, see Publication 527. 1040ez tax forms 2013 For a detailed discussion of material participation, see Publication 925. 1040ez tax forms 2013 Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. 1040ez tax forms 2013 Instead, follow the rules explained in Personal Use of Dwelling Unit (Including Vacation Home), earlier. 1040ez tax forms 2013 Exception for Rental Real Estate Activities With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. 1040ez tax forms 2013 This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. 1040ez tax forms 2013 Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. 1040ez tax forms 2013 Active participation. 1040ez tax forms 2013   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. 1040ez tax forms 2013 Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. 1040ez tax forms 2013 Maximum special allowance. 1040ez tax forms 2013   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. 1040ez tax forms 2013   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. 1040ez tax forms 2013 If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. 1040ez tax forms 2013   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. 1040ez tax forms 2013 More information. 1040ez tax forms 2013   See Publication 925 for more information on the passive loss limits, including information on the treatment of unused disallowed passive losses and credits and the treatment of gains and losses realized on the disposition of a passive activity. 1040ez tax forms 2013 How To Report Rental Income and Expenses The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). 1040ez tax forms 2013 However, do not use that schedule to report a not-for-profit activity. 1040ez tax forms 2013 See Not Rented for Profit, earlier. 1040ez tax forms 2013 Providing substantial services. 1040ez tax forms 2013   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business (Sole Proprietorship). 1040ez tax forms 2013 Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. 1040ez tax forms 2013 For information, see Publication 334, Tax Guide for Small Business. 1040ez tax forms 2013 You also may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. 1040ez tax forms 2013   Use Form 1065, U. 1040ez tax forms 2013 S. 1040ez tax forms 2013 Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). 1040ez tax forms 2013 Qualified joint venture. 1040ez tax forms 2013   If you and your spouse each materially participate as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. 1040ez tax forms 2013 This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. 1040ez tax forms 2013 For more information, see Publication 527. 1040ez tax forms 2013 Form 1098, Mortgage Interest Statement. 1040ez tax forms 2013    If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098, or similar statement showing the interest you paid for the year. 1040ez tax forms 2013 If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. 1040ez tax forms 2013 Attach a statement to your return showing the name and address of the other person. 1040ez tax forms 2013 In the left margin of Schedule E, next to line 13, enter “See attached. 1040ez tax forms 2013 ” Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. 1040ez tax forms 2013 , you normally report your rental income and expenses on Schedule E, Part I. 1040ez tax forms 2013 List your total income, expenses, and depreciation for each rental property. 1040ez tax forms 2013 Be sure to enter the number of fair rental and personal use days on line 2. 1040ez tax forms 2013 If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. 1040ez tax forms 2013 Complete lines 1 and 2 for each property. 1040ez tax forms 2013 However, fill in lines 23a through 26 on only one Schedule E. 1040ez tax forms 2013 On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. 1040ez tax forms 2013 To find out if you need to attach Form 4562, see Form 4562, in chapter 3 of Publication 527. 1040ez tax forms 2013 If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. 1040ez tax forms 2013 Form 6198, At-Risk Limitations. 1040ez tax forms 2013 See At-Risk Rules , earlier. 1040ez tax forms 2013 Also see Publication 925. 1040ez tax forms 2013 Form 8582, Passive Activity Loss Limitations. 1040ez tax forms 2013 See Passive Activity Limits , earlier. 1040ez tax forms 2013 Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. 1040ez tax forms 2013 If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. 1040ez tax forms 2013 Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). 1040ez tax forms 2013 Worksheet 9-1. 1040ez tax forms 2013 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. 1040ez tax forms 2013 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . 1040ez tax forms 2013 ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. 1040ez tax forms 2013 Rental Use Percentage A. 1040ez tax forms 2013 Total days available for rent at fair rental price A. 1040ez tax forms 2013       B. 1040ez tax forms 2013 Total days available for rent (line A) but not rented B. 1040ez tax forms 2013       C. 1040ez tax forms 2013 Total days of rental use. 1040ez tax forms 2013 Subtract line B from line A C. 1040ez tax forms 2013       D. 1040ez tax forms 2013 Total days of personal use (including days rented at less than fair rental price) D. 1040ez tax forms 2013       E. 1040ez tax forms 2013 Total days of rental and personal use. 1040ez tax forms 2013 Add lines C and D E. 1040ez tax forms 2013       F. 1040ez tax forms 2013 Percentage of expenses allowed for rental. 1040ez tax forms 2013 Divide line C by line E     F. 1040ez tax forms 2013   PART II. 1040ez tax forms 2013 Allowable Rental Expenses 1. 1040ez tax forms 2013 Enter rents received 1. 1040ez tax forms 2013   2a. 1040ez tax forms 2013 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. 1040ez tax forms 2013       b. 1040ez tax forms 2013 Enter the rental portion of real estate taxes b. 1040ez tax forms 2013       c. 1040ez tax forms 2013 Enter the rental portion of deductible casualty and theft losses (see instructions) c. 1040ez tax forms 2013       d. 1040ez tax forms 2013 Enter direct rental expenses (see instructions) d. 1040ez tax forms 2013       e. 1040ez tax forms 2013 Fully deductible rental expenses. 1040ez tax forms 2013 Add lines 2a–2d. 1040ez tax forms 2013 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. 1040ez tax forms 2013   3. 1040ez tax forms 2013 Subtract line 2e from line 1. 1040ez tax forms 2013 If zero or less, enter -0- 3. 1040ez tax forms 2013   4a. 1040ez tax forms 2013 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. 1040ez tax forms 2013       b. 1040ez tax forms 2013 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. 1040ez tax forms 2013       c. 1040ez tax forms 2013 Carryover of operating expenses from 2012 worksheet c. 1040ez tax forms 2013       d. 1040ez tax forms 2013 Add lines 4a–4c d. 1040ez tax forms 2013       e. 1040ez tax forms 2013 Allowable expenses. 1040ez tax forms 2013 Enter the smaller of line 3 or line 4d (see instructions) 4e. 1040ez tax forms 2013   5. 1040ez tax forms 2013 Subtract line 4e from line 3. 1040ez tax forms 2013 If zero or less, enter -0- 5. 1040ez tax forms 2013   6a. 1040ez tax forms 2013 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. 1040ez tax forms 2013       b. 1040ez tax forms 2013 Enter the rental portion of depreciation of the dwelling unit b. 1040ez tax forms 2013       c. 1040ez tax forms 2013 Carryover of excess casualty losses and depreciation from 2012 worksheet c. 1040ez tax forms 2013       d. 1040ez tax forms 2013 Add lines 6a–6c d. 1040ez tax forms 2013       e. 1040ez tax forms 2013 Allowable excess casualty and theft losses and depreciation. 1040ez tax forms 2013 Enter the smaller of  line 5 or line 6d (see instructions) 6e. 1040ez tax forms 2013   PART III. 1040ez tax forms 2013 Carryover of Unallowed Expenses to Next Year 7a. 1040ez tax forms 2013 Operating expenses to be carried over to next year. 1040ez tax forms 2013 Subtract line 4e from line 4d 7a. 1040ez tax forms 2013   b. 1040ez tax forms 2013 Excess casualty and theft losses and depreciation to be carried over to next year. 1040ez tax forms 2013  Subtract line 6e from line 6d b. 1040ez tax forms 2013   Worksheet 9-1 Instructions. 1040ez tax forms 2013 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. 1040ez tax forms 2013 Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. 1040ez tax forms 2013 Line 2a. 1040ez tax forms 2013 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. 1040ez tax forms 2013 Do not include interest on a loan that did not benefit the dwelling unit. 1040ez tax forms 2013 For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. 1040ez tax forms 2013 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. 1040ez tax forms 2013 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. 1040ez tax forms 2013   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. 1040ez tax forms 2013 See the Schedule A instructions. 1040ez tax forms 2013 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. 1040ez tax forms 2013 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. 1040ez tax forms 2013 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. 1040ez tax forms 2013   Note. 1040ez tax forms 2013 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. 1040ez tax forms 2013 Instead, figure the personal portion on a separate Schedule A. 1040ez tax forms 2013 If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. 1040ez tax forms 2013           Line 2c. 1040ez tax forms 2013 Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. 1040ez tax forms 2013 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. 1040ez tax forms 2013 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. 1040ez tax forms 2013 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. 1040ez tax forms 2013 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. 1040ez tax forms 2013   Note. 1040ez tax forms 2013 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. 1040ez tax forms 2013 Instead, figure the personal portion on a separate Form 4684. 1040ez tax forms 2013           Line 2d. 1040ez tax forms 2013 Enter the total of your rental expenses that are directly related only to the rental activity. 1040ez tax forms 2013 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. 1040ez tax forms 2013 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. 1040ez tax forms 2013           Line 2e. 1040ez tax forms 2013 You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. 1040ez tax forms 2013 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. 1040ez tax forms 2013           Line 4b. 1040ez tax forms 2013 On line 2a, you entered the rental portion of the mortgage interest and qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. 1040ez tax forms 2013 If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. 1040ez tax forms 2013 Do not include interest on a loan that did not benefit the dwelling unit (as explained in the line 2a instructions). 1040ez tax forms 2013           Line 4e. 1040ez tax forms 2013 You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. 1040ez tax forms 2013 *           Line 6a. 1040ez tax forms 2013 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. 1040ez tax forms 2013   A. 1040ez tax forms 2013 Enter the amount from Form 4684, line 10       B. 1040ez tax forms 2013 Enter the rental portion of line A       C. 1040ez tax forms 2013 Enter the amount from line 2c of this worksheet       D. 1040ez tax forms 2013 Subtract line C from line B. 1040ez tax forms 2013 Enter the result here and on line 6a of this worksheet               Line 6e. 1040ez tax forms 2013 You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. 1040ez tax forms 2013 * *Allocating the limited deduction. 1040ez tax forms 2013 If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. 1040ez tax forms 2013 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. 1040ez tax forms 2013 Prev  Up  Next   Home   More Online Publications