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2012 1040ez Tax Form

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IRS Has $760 Million for People Who Have Not Filed a 2010 Income Tax Return

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IR-2014-30, March 19, 2014

WASHINGTON — Refunds totaling almost $760 million may be waiting for an estimated 918,600 taxpayers who did not file a federal income tax return for 2010, the Internal Revenue Service announced today. However, to collect the money, a return for 2010 must be filed with the IRS no later than Tuesday, April 15, 2014.

"The window is quickly closing for people who are owed refunds from 2010 who haven't filed a tax return," said IRS Commissioner John Koskinen. "We encourage students, part-time workers and others who haven't filed for 2010 to look into this before time runs out on April 15."

The IRS estimates that half the potential refunds for 2010 are more than $571.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2010 returns, the window closes on April 15, 2014. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

The IRS reminds taxpayers seeking a 2010 refund that their checks may be held if they have not filed tax returns for 2011 and 2012. In addition, the refund will be applied to any amounts still owed to the IRS or their state tax agency, and may be used to offset unpaid child support or past due federal debts such as student loans.

By failing to file a return, people stand to lose more than just their refund of taxes withheld or paid during 2010. In addition, many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). For 2010, the credit is worth as much as $5,666. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2010 were:

  • $43,352 ($48,362 if married filing jointly) for those with three or more qualifying children,
  • $40,363 ($45,373 if married filing jointly) for people with two qualifying children,
  • $35,535 ($40,545 if married filing jointly) for those with one qualifying child, and
  • $13,460 ($18,470 if married filing jointly) for people without qualifying children.

Current and prior year tax forms and instructions are available on the Forms and Publications page of IRS.gov or by calling toll-free 800-TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2010, 2011 or 2012 should request copies from their employer, bank or other payer.

If these efforts are unsuccessful, taxpayers can get a free transcript showing information from these year-end documents by going to IRS.gov. Taxpayers can also file Form 4506-T to request a transcript of their tax return.

Individuals who did not file a 2010 return with a potential refund:
 

State or District

Estimated

Number of

Individuals

Median

Potential

Refund

Total

Potential

Refunds*

 

Alabama

15,700

$574

$12,473,000

Alaska

4,700

$649

$4,810,000

Arizona

23,800

$508

$17,517,000

Arkansas

8,400

$562

$6,667,000

California

86,500

$519

$69,752,000

Colorado

17,100

$567

$14,061,000

Connecticut

11,700

$620

$10,304,000

Delaware

3,800

$573

$3,126,000

District of Columbia

3,500

$604

$3,080,000

Florida

56,800

$593

$48,407,000

Georgia

28,400

$539

$22,504,000

Hawaii

6,200

$586

$5,413,000

Idaho

3,500

$490

$2,604,000

Illinois

37,900

$626

$32,696,000

Indiana

19,600

$570

$15,478,000

Iowa

9,200

$576

$7,050,000

Kansas

9,300

$522

$6,986,000

Kentucky

11,500

$576

$8,975,000

Louisiana

17,500

$603

$15,579,000

Maine

3,500

$502

$2,373,000

Maryland

20,700

$575

$18,002,000

Massachusetts

21,000

$560

$17,856,000

Michigan

29,200

$597

$24,259,000

Minnesota

12,700

$516

$9,582,000

Mississippi

8,500

$556

$6,769,000

Missouri

17,900

$514

$13,153,000

Montana

2,900

$534

$2,338,000

Nebraska

4,500

$528

$3,368,000

Nevada

11,400

$570

$9,156,000

New Hampshire

3,800

$602

$3,245,000

New Jersey

29,500

$639

$26,712,000

New Mexico

7,200

$572

$5,915,000

New York

57,400

$623

$50,543,000

North Carolina

24,300

$494

$17,538,000

North Dakota

1,900

$600

$1,551,000

Ohio

32,100

$560

$24,508,000

Oklahoma

15,100

$585

$12,246,000

Oregon

14,300

$519

$10,359,000

Pennsylvania

37,400

$614

$31,009,000

Rhode Island

3,000

$598

$2,472,000

South Carolina

10,200

$532

$7,756,000

South Dakota

2,100

$558

$1,605,000

Tennessee

16,300

$559

$12,839,000

Texas

80,600

$588

$71,998,000

Utah

6,100

$518

$4,705,000

Vermont

1,600

$519

$1,136,000

Virginia

26,300

$568

$22,376,000

Washington

24,800

$640

$23,033,000

West Virginia

4,100

$626

$3,534,000

Wisconsin

10,900

$516

$8,423,000

Wyoming

2,200

$648

$2,045,000

Totals

918,600

$571

$759,889,000

                      * Excluding the Earned Income Tax Credit and other credits.

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Page Last Reviewed or Updated: 28-Mar-2014

The 2012 1040ez Tax Form

2012 1040ez tax form Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. 2012 1040ez tax form Publication 946, How To Depreciate Property, contains information on depreciation. 2012 1040ez tax form However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. 2012 1040ez tax form The new provisions are in the Supplement to Publication 946, which is reprinted below. 2012 1040ez tax form Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. 2012 1040ez tax form The new law made several changes in the tax rules explained in the publication. 2012 1040ez tax form Some of the changes apply to property placed in service during 2001. 2012 1040ez tax form This supplemental publication describes those changes and explains what you should do if you are affected by them. 2012 1040ez tax form The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. 2012 1040ez tax form The new law contains the following provisions. 2012 1040ez tax form 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. 2012 1040ez tax form An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. 2012 1040ez tax form A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. 2012 1040ez tax form An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. 2012 1040ez tax form If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. 2012 1040ez tax form If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. 2012 1040ez tax form See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. 2012 1040ez tax form Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. 2012 1040ez tax form The allowance is an additional deduction of 30% of the property's depreciable basis. 2012 1040ez tax form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 2012 1040ez tax form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 2012 1040ez tax form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 2012 1040ez tax form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2012 1040ez tax form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 2012 1040ez tax form Example 1. 2012 1040ez tax form On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. 2012 1040ez tax form You did not elect to claim a section 179 deduction. 2012 1040ez tax form You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. 2012 1040ez tax form You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. 2012 1040ez tax form Example 2. 2012 1040ez tax form The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. 2012 1040ez tax form You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). 2012 1040ez tax form You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. 2012 1040ez tax form Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. 2012 1040ez tax form It is new property of one of the following types. 2012 1040ez tax form Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. 2012 1040ez tax form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 2012 1040ez tax form Water utility property. 2012 1040ez tax form See 25-year property on page 22 in Publication 946. 2012 1040ez tax form Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 2012 1040ez tax form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2012 1040ez tax form ) Qualified leasehold improvement property (defined later). 2012 1040ez tax form It meets the following tests (explained later under Tests To Be Met). 2012 1040ez tax form Acquisition date test. 2012 1040ez tax form Placed in service date test. 2012 1040ez tax form Original use test. 2012 1040ez tax form It is not excepted property (explained later under Excepted Property). 2012 1040ez tax form Qualified leasehold improvement property. 2012 1040ez tax form    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. 2012 1040ez tax form The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 2012 1040ez tax form That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 2012 1040ez tax form The improvement is placed in service more than 3 years after the date the building was first placed in service. 2012 1040ez tax form   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 2012 1040ez tax form The enlargement of the building. 2012 1040ez tax form Any elevator or escalator. 2012 1040ez tax form Any structural component benefiting a common area. 2012 1040ez tax form The internal structural framework of the building. 2012 1040ez tax form   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. 2012 1040ez tax form However, a binding commitment between related persons is not treated as a lease. 2012 1040ez tax form Related persons. 2012 1040ez tax form   For this purpose, the following are related persons. 2012 1040ez tax form Members of an affiliated group. 2012 1040ez tax form The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). 2012 1040ez tax form An executor and a beneficiary of the same estate. 2012 1040ez tax form Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. 2012 1040ez tax form Acquisition date test. 2012 1040ez tax form    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. 2012 1040ez tax form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. 2012 1040ez tax form Placed in service date test. 2012 1040ez tax form   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. 2012 1040ez tax form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 2012 1040ez tax form Original use test. 2012 1040ez tax form   The original use of the property must have begun with you after September 10, 2001. 2012 1040ez tax form “Original use” means the first use to which the property is put, whether or not by you. 2012 1040ez tax form Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. 2012 1040ez tax form Excepted Property The following property does not qualify for the special depreciation allowance. 2012 1040ez tax form Property used by any person before September 11, 2001. 2012 1040ez tax form Property required to be depreciated using ADS. 2012 1040ez tax form This includes listed property used 50% or less in a qualified business use. 2012 1040ez tax form Qualified New York Liberty Zone leasehold improvement property (defined next). 2012 1040ez tax form Qualified New York Liberty Zone leasehold improvement property. 2012 1040ez tax form   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. 2012 1040ez tax form The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). 2012 1040ez tax form The improvement is placed in service after September 10, 2001, and before January 1, 2007. 2012 1040ez tax form No written binding contract for the improvement was in effect before September 11, 2001. 2012 1040ez tax form Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. 2012 1040ez tax form If you make this election for any property, it applies to all property in the same property class placed in service during the year. 2012 1040ez tax form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 2012 1040ez tax form When to make election. 2012 1040ez tax form   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2012 1040ez tax form   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2012 1040ez tax form Attach the election statement to the amended return. 2012 1040ez tax form At the top of the election statement, write “Filed pursuant to section 301. 2012 1040ez tax form 9100–2. 2012 1040ez tax form ” Revoking an election. 2012 1040ez tax form   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2012 1040ez tax form A request to revoke the election is subject to a user fee. 2012 1040ez tax form Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. 2012 1040ez tax form The rules apply to returns for the following years. 2012 1040ez tax form 2000 fiscal years that end after September 10, 2001. 2012 1040ez tax form 2001 calendar and fiscal years. 2012 1040ez tax form Claiming the allowance. 2012 1040ez tax form   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. 2012 1040ez tax form File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. 2012 1040ez tax form Write “Filed Pursuant to Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33” at the top of the amended return. 2012 1040ez tax form File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. 2012 1040ez tax form Your return must be filed by the due date (including extensions). 2012 1040ez tax form Write “Automatic Change Filed Under Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33” on the appropriate line of Form 3115. 2012 1040ez tax form You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. 2012 1040ez tax form For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. 2012 1040ez tax form Example 1. 2012 1040ez tax form You are an individual and you use the calendar year. 2012 1040ez tax form You placed qualified property in service for your business in December 2001. 2012 1040ez tax form You filed your 2001 income tax return before April 15, 2002. 2012 1040ez tax form You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. 2012 1040ez tax form You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33” at the top of the amended return. 2012 1040ez tax form You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. 2012 1040ez tax form Example 2. 2012 1040ez tax form The facts concerning your 2001 return are the same as in Example 1. 2012 1040ez tax form In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. 2012 1040ez tax form You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. 2012 1040ez tax form You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. 2012 1040ez tax form Electing not to claim the allowance. 2012 1040ez tax form   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. 2012 1040ez tax form The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. 2012 1040ez tax form The statement can be either attached to or written on the return. 2012 1040ez tax form You can, for example, write “not deducting 30%” on Form 4562. 2012 1040ez tax form Deemed election. 2012 1040ez tax form   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. 2012 1040ez tax form You will be treated as making the election if you meet both of the following conditions. 2012 1040ez tax form You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. 2012 1040ez tax form You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. 2012 1040ez tax form See Claiming the allowance, earlier. 2012 1040ez tax form Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. 2012 1040ez tax form Generally, the limit is increased from $3,060 to $7,660. 2012 1040ez tax form However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). 2012 1040ez tax form Table 1 shows the maximum deduction amounts for 2001. 2012 1040ez tax form Table 1. 2012 1040ez tax form Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. 2012 1040ez tax form 11 Placed in Service After Sept. 2012 1040ez tax form 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. 2012 1040ez tax form Election not to claim the allowance. 2012 1040ez tax form   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. 2012 1040ez tax form New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). 2012 1040ez tax form They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. 2012 1040ez tax form Area defined. 2012 1040ez tax form   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. 2012 1040ez tax form Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. 2012 1040ez tax form The allowance is an additional deduction of 30% of the property's depreciable basis. 2012 1040ez tax form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 2012 1040ez tax form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 2012 1040ez tax form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 2012 1040ez tax form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2012 1040ez tax form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 2012 1040ez tax form You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 2012 1040ez tax form Qualified property is eligible for only one special depreciation allowance. 2012 1040ez tax form Example 1. 2012 1040ez tax form On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. 2012 1040ez tax form You did not elect to claim a section 179 deduction. 2012 1040ez tax form You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. 2012 1040ez tax form You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. 2012 1040ez tax form Example 2. 2012 1040ez tax form The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. 2012 1040ez tax form (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). 2012 1040ez tax form You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). 2012 1040ez tax form You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. 2012 1040ez tax form Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. 2012 1040ez tax form It is one of the following types of property. 2012 1040ez tax form Used property depreciated under MACRS with a recovery period of 20 years or less. 2012 1040ez tax form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 2012 1040ez tax form Used water utility property. 2012 1040ez tax form See 25-year property on page 22 in Publication 946. 2012 1040ez tax form Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 2012 1040ez tax form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2012 1040ez tax form ) Certain nonresidential real property and residential rental property (defined later). 2012 1040ez tax form It meets the following tests (explained later under Tests to be met). 2012 1040ez tax form Acquisition date test. 2012 1040ez tax form Placed in service date test. 2012 1040ez tax form Substantial use test. 2012 1040ez tax form Original use test. 2012 1040ez tax form It is not excepted property (explained later under Excepted property). 2012 1040ez tax form Nonresidential real property and residential rental property. 2012 1040ez tax form   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. 2012 1040ez tax form Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. 2012 1040ez tax form   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. 2012 1040ez tax form Otherwise, the property is considered damaged real property. 2012 1040ez tax form For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. 2012 1040ez tax form Tests to be met. 2012 1040ez tax form   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. 2012 1040ez tax form Acquisition date test. 2012 1040ez tax form   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. 2012 1040ez tax form   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. 2012 1040ez tax form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. 2012 1040ez tax form Placed in service date test. 2012 1040ez tax form   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). 2012 1040ez tax form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 2012 1040ez tax form Substantial use test. 2012 1040ez tax form   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. 2012 1040ez tax form Original use test. 2012 1040ez tax form   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. 2012 1040ez tax form   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. 2012 1040ez tax form Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. 2012 1040ez tax form Excepted property. 2012 1040ez tax form   The following property does not qualify for the special Liberty Zone depreciation allowance. 2012 1040ez tax form Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 2012 1040ez tax form Property required to be depreciated using ADS. 2012 1040ez tax form This includes listed property used 50% or less in a qualified business use. 2012 1040ez tax form Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). 2012 1040ez tax form Example. 2012 1040ez tax form In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. 2012 1040ez tax form New office furniture with a MACRS recovery period of 7 years. 2012 1040ez tax form A used computer with a MACRS recovery period of 5 years. 2012 1040ez tax form The computer had not previously been used within the Liberty Zone. 2012 1040ez tax form Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. 2012 1040ez tax form Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. 2012 1040ez tax form Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. 2012 1040ez tax form If you make this election for any property, it applies to all property in the same property class placed in service during the year. 2012 1040ez tax form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 2012 1040ez tax form When to make the election. 2012 1040ez tax form   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2012 1040ez tax form   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2012 1040ez tax form Attach the election statement to the amended return. 2012 1040ez tax form At the top of the election statement, write “Filed pursuant to section 301. 2012 1040ez tax form 9100–2. 2012 1040ez tax form ” Revoking an election. 2012 1040ez tax form   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2012 1040ez tax form A request to revoke the election is subject to a user fee. 2012 1040ez tax form Returns filed before June 1, 2002. 2012 1040ez tax form   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. 2012 1040ez tax form Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. 2012 1040ez tax form For tax years beginning in 2000, that limit was $20,000. 2012 1040ez tax form For tax years beginning in 2001 and 2002, that limit is generally $24,000. 2012 1040ez tax form If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. 2012 1040ez tax form Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. 2012 1040ez tax form The increase is the smaller of the following amounts. 2012 1040ez tax form $35,000. 2012 1040ez tax form The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. 2012 1040ez tax form If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. 2012 1040ez tax form Qualified property. 2012 1040ez tax form   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. 2012 1040ez tax form Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. 2012 1040ez tax form Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. 2012 1040ez tax form For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. 2012 1040ez tax form Example 1. 2012 1040ez tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. 2012 1040ez tax form Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). 2012 1040ez tax form Example 2. 2012 1040ez tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. 2012 1040ez tax form Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). 2012 1040ez tax form Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. 2012 1040ez tax form However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. 2012 1040ez tax form Example. 2012 1040ez tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. 2012 1040ez tax form Your increased dollar limit is $59,000 ($35,000 + $24,000). 2012 1040ez tax form Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). 2012 1040ez tax form Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. 2012 1040ez tax form Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. 2012 1040ez tax form This rule applies to returns for the following years. 2012 1040ez tax form 2000 fiscal years that end after September 10, 2001. 2012 1040ez tax form 2001 calendar and fiscal years. 2012 1040ez tax form On the amended return, write “Filed Pursuant to Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33. 2012 1040ez tax form ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. 2012 1040ez tax form This means that it is depreciated over a recovery period of 5 years. 2012 1040ez tax form For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. 2012 1040ez tax form The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. 2012 1040ez tax form Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. 2012 1040ez tax form Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. 2012 1040ez tax form Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). 2012 1040ez tax form Your 2001 calendar or fiscal year return. 2012 1040ez tax form On the amended return, write “Filed Pursuant to Rev. 2012 1040ez tax form Proc. 2012 1040ez tax form 2002–33. 2012 1040ez tax form ” Table 2. 2012 1040ez tax form Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. 2012 1040ez tax form See the text for definitions and examples. 2012 1040ez tax form Do not rely on this chart alone. 2012 1040ez tax form IF you want to. 2012 1040ez tax form . 2012 1040ez tax form . 2012 1040ez tax form THEN you. 2012 1040ez tax form . 2012 1040ez tax form . 2012 1040ez tax form BY. 2012 1040ez tax form . 2012 1040ez tax form . 2012 1040ez tax form claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. 2012 1040ez tax form elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). 2012 1040ez tax form deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. 2012 1040ez tax form use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. 2012 1040ez tax form 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. 2012 1040ez tax form Prev  Up  Next   Home   More Online Publications