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2012 Irs Income Tax Forms

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2012 Irs Income Tax Forms

2012 irs income tax forms 4. 2012 irs income tax forms   Transportation Table of Contents Parking fees. 2012 irs income tax forms Advertising display on car. 2012 irs income tax forms Car pools. 2012 irs income tax forms Hauling tools or instruments. 2012 irs income tax forms Union members' trips from a union hall. 2012 irs income tax forms Car ExpensesStandard Mileage Rate Actual Car Expenses Leasing a Car Disposition of a Car This chapter discusses expenses you can deduct for business transportation when you are not traveling away from home as defined in chapter 1. 2012 irs income tax forms These expenses include the cost of transportation by air, rail, bus, taxi, etc. 2012 irs income tax forms , and the cost of driving and maintaining your car. 2012 irs income tax forms Transportation expenses include the ordinary and necessary costs of all of the following. 2012 irs income tax forms Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. 2012 irs income tax forms Tax home is defined in chapter 1. 2012 irs income tax forms Visiting clients or customers. 2012 irs income tax forms Going to a business meeting away from your regular workplace. 2012 irs income tax forms Getting from your home to a temporary workplace when you have one or more regular places of work. 2012 irs income tax forms These temporary workplaces can be either within the area of your tax home or outside that area. 2012 irs income tax forms Transportation expenses do not include expenses you have while traveling away from home overnight. 2012 irs income tax forms Those expenses are travel expenses discussed in chapter 1 . 2012 irs income tax forms However, if you use your car while traveling away from home overnight, use the rules in this chapter to figure your car expense deduction. 2012 irs income tax forms See Car Expenses , later. 2012 irs income tax forms Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. 2012 irs income tax forms However, there may be exceptions to this general rule. 2012 irs income tax forms You can deduct daily transportation expenses incurred going between your residence and a temporary work station outside the metropolitan area where you live. 2012 irs income tax forms Also, daily transportation expenses can be deducted if: (1) you have one or more regular work locations away from your residence or (2) your residence is your principal place of business and you incur expenses going between the residence and another work location in the same trade or business, regardless of whether the work is temporary or permanent and regardless of the distance. 2012 irs income tax forms Illustration of transportation expenses. 2012 irs income tax forms    Figure B , earlier, illustrates the rules that apply for deducting transportation expenses when you have a regular or main job away from your home. 2012 irs income tax forms You may want to refer to it when deciding whether you can deduct your transportation expenses. 2012 irs income tax forms Temporary work location. 2012 irs income tax forms   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. 2012 irs income tax forms   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. 2012 irs income tax forms   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. 2012 irs income tax forms   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. 2012 irs income tax forms It will not be treated as temporary after the date you determine it will last more than 1 year. 2012 irs income tax forms   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. 2012 irs income tax forms You may have deductible travel expenses as discussed in chapter 1 . 2012 irs income tax forms No regular place of work. 2012 irs income tax forms   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. 2012 irs income tax forms   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. 2012 irs income tax forms   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. 2012 irs income tax forms These are nondeductible commuting expenses. 2012 irs income tax forms Two places of work. 2012 irs income tax forms   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. 2012 irs income tax forms However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. 2012 irs income tax forms   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. 2012 irs income tax forms You cannot deduct them. 2012 irs income tax forms Armed Forces reservists. 2012 irs income tax forms   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. 2012 irs income tax forms You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work . 2012 irs income tax forms   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. 2012 irs income tax forms In this case, your transportation generally is a nondeductible commuting expense. 2012 irs income tax forms However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. 2012 irs income tax forms   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. 2012 irs income tax forms   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. 2012 irs income tax forms These expenses are discussed in chapter 1 . 2012 irs income tax forms   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to gross income rather than as an itemized deduction. 2012 irs income tax forms For more information, see Armed Forces Reservists Traveling More Than 100 Miles From Home under Special Rules, in chapter 6. 2012 irs income tax forms Commuting expenses. 2012 irs income tax forms   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. 2012 irs income tax forms These costs are personal commuting expenses. 2012 irs income tax forms You cannot deduct commuting expenses no matter how far your home is from your regular place of work. 2012 irs income tax forms You cannot deduct commuting expenses even if you work during the commuting trip. 2012 irs income tax forms Example. 2012 irs income tax forms You sometimes use your cell phone to make business calls while commuting to and from work. 2012 irs income tax forms Sometimes business associates ride with you to and from work, and you have a business discussion in the car. 2012 irs income tax forms These activities do not change the trip from personal to business. 2012 irs income tax forms You cannot deduct your commuting expenses. 2012 irs income tax forms Parking fees. 2012 irs income tax forms    Fees you pay to park your car at your place of business are nondeductible commuting expenses. 2012 irs income tax forms You can, however, deduct business-related parking fees when visiting a customer or client. 2012 irs income tax forms Advertising display on car. 2012 irs income tax forms   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. 2012 irs income tax forms If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. 2012 irs income tax forms Car pools. 2012 irs income tax forms   You cannot deduct the cost of using your car in a nonprofit car pool. 2012 irs income tax forms Do not include payments you receive from the passengers in your income. 2012 irs income tax forms These payments are considered reimbursements of your expenses. 2012 irs income tax forms However, if you operate a car pool for a profit, you must include payments from passengers in your income. 2012 irs income tax forms You can then deduct your car expenses (using the rules in this publication). 2012 irs income tax forms Hauling tools or instruments. 2012 irs income tax forms   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. 2012 irs income tax forms However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). 2012 irs income tax forms Union members' trips from a union hall. 2012 irs income tax forms   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. 2012 irs income tax forms Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. 2012 irs income tax forms Office in the home. 2012 irs income tax forms   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. 2012 irs income tax forms (See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. 2012 irs income tax forms ) Examples of deductible transportation. 2012 irs income tax forms   The following examples show when you can deduct transportation expenses based on the location of your work and your home. 2012 irs income tax forms Example 1. 2012 irs income tax forms You regularly work in an office in the city where you live. 2012 irs income tax forms Your employer sends you to a 1-week training session at a different office in the same city. 2012 irs income tax forms You travel directly from your home to the training location and return each day. 2012 irs income tax forms You can deduct the cost of your daily round-trip transportation between your home and the training location. 2012 irs income tax forms Example 2. 2012 irs income tax forms Your principal place of business is in your home. 2012 irs income tax forms You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. 2012 irs income tax forms Example 3. 2012 irs income tax forms You have no regular office, and you do not have an office in your home. 2012 irs income tax forms In this case, the location of your first business contact inside the metropolitan area is considered your office. 2012 irs income tax forms Transportation expenses between your home and this first contact are nondeductible commuting expenses. 2012 irs income tax forms Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. 2012 irs income tax forms While you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another. 2012 irs income tax forms Car Expenses If you use your car for business purposes, you ordinarily can deduct car expenses. 2012 irs income tax forms You generally can use one of the two following methods to figure your deductible expenses. 2012 irs income tax forms Standard mileage rate. 2012 irs income tax forms Actual car expenses. 2012 irs income tax forms If you use actual expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. 2012 irs income tax forms See Leasing a Car , later. 2012 irs income tax forms In this publication, “car” includes a van, pickup, or panel truck. 2012 irs income tax forms For the definition of “car” for depreciation purposes, see Car defined under Actual Car Expenses, later. 2012 irs income tax forms Rural mail carriers. 2012 irs income tax forms   If you are a rural mail carrier, you may be able to treat the qualified reimbursement you received as your allowable expense. 2012 irs income tax forms Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the reimbursement in your income. 2012 irs income tax forms   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). 2012 irs income tax forms You must complete Form 2106 and attach it to your Form 1040, U. 2012 irs income tax forms S. 2012 irs income tax forms Individual Income Tax Return. 2012 irs income tax forms   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. 2012 irs income tax forms It is given as an equipment maintenance allowance (EMA) to employees of the U. 2012 irs income tax forms S. 2012 irs income tax forms Postal Service. 2012 irs income tax forms It is at the rate contained in the 1991 collective bargaining agreement. 2012 irs income tax forms Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. 2012 irs income tax forms See your employer for information on your reimbursement. 2012 irs income tax forms    If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. 2012 irs income tax forms Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. 2012 irs income tax forms For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. 2012 irs income tax forms If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year. 2012 irs income tax forms You cannot deduct depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance, or vehicle registration fees. 2012 irs income tax forms See Choosing the standard mileage rate and Standard mileage rate not allowed, later. 2012 irs income tax forms You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. 2012 irs income tax forms See chapter 6 for more information on reimbursements . 2012 irs income tax forms Choosing the standard mileage rate. 2012 irs income tax forms   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. 2012 irs income tax forms Then, in later years, you can choose to use either the standard mileage rate or actual expenses. 2012 irs income tax forms   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. 2012 irs income tax forms For leases that began on or before December 31, 1997, the standard mileage rate must be used for the entire portion of the lease period (including renewals) that is after 1997. 2012 irs income tax forms   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. 2012 irs income tax forms You cannot revoke the choice. 2012 irs income tax forms However, in later years, you can switch from the standard mileage rate to the actual expenses method. 2012 irs income tax forms If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. 2012 irs income tax forms Example. 2012 irs income tax forms Larry is an employee who occasionally uses his own car for business purposes. 2012 irs income tax forms He purchased the car in 2011, but he did not claim any unreimbursed employee expenses on his 2011 tax return. 2012 irs income tax forms Because Larry did not use the standard mileage rate the first year the car was available for business use, he cannot use the standard mileage rate in 2013 to claim unreimbursed employee business expenses. 2012 irs income tax forms   For more information about depreciation included in the standard mileage rate, see Exception under Methods of depreciation, later. 2012 irs income tax forms Standard mileage rate not allowed. 2012 irs income tax forms   You cannot use the standard mileage rate if you: Use five or more cars at the same time (such as in fleet operations), Claimed a depreciation deduction for the car using any method other than straight line, for example, MACRS (as discussed later under Depreciation Deduction), Claimed a section 179 deduction (discussed later) on the car, Claimed the special depreciation allowance on the car, Claimed actual car expenses after 1997 for a car you leased, or Are a rural mail carrier who received a qualified reimbursement. 2012 irs income tax forms (See Rural mail carriers , earlier. 2012 irs income tax forms ) Note. 2012 irs income tax forms You can elect to use the standard mileage rate if you used a car for hire (such as a taxi) unless the standard mileage rate is otherwise not allowed, as discussed above. 2012 irs income tax forms Five or more cars. 2012 irs income tax forms   If you own or lease five or more cars that are used for business at the same time, you cannot use the standard mileage rate for the business use of any car. 2012 irs income tax forms However, you may be able to deduct your actual expenses for operating each of the cars in your business. 2012 irs income tax forms See Actual Car Expenses , later, for information on how to figure your deduction. 2012 irs income tax forms   You are not using five or more cars for business at the same time if you alternate using (use at different times) the cars for business. 2012 irs income tax forms   The following examples illustrate the rules for when you can and cannot use the standard mileage rate for five or more cars. 2012 irs income tax forms Example 1. 2012 irs income tax forms Marcia, a salesperson, owns three cars and two vans that she alternates using for calling on her customers. 2012 irs income tax forms She can use the standard mileage rate for the business mileage of the three cars and the two vans because she does not use them at the same time. 2012 irs income tax forms Example 2. 2012 irs income tax forms Tony and his employees use his four pickup trucks in his landscaping business. 2012 irs income tax forms During the year, he traded in two of his old trucks for two newer ones. 2012 irs income tax forms Tony can use the standard mileage rate for the business mileage of all six of the trucks he owned during the year. 2012 irs income tax forms Example 3. 2012 irs income tax forms Chris owns a repair shop and an insurance business. 2012 irs income tax forms He and his employees use his two pickup trucks and van for the repair shop. 2012 irs income tax forms Chris alternates using his two cars for the insurance business. 2012 irs income tax forms No one else uses the cars for business purposes. 2012 irs income tax forms Chris can use the standard mileage rate for the business use of the pickup trucks, van, and the cars because he never has more than four vehicles used for business at the same time. 2012 irs income tax forms Example 4. 2012 irs income tax forms Maureen owns a car and four vans that are used in her housecleaning business. 2012 irs income tax forms Her employees use the vans, and she uses the car to travel to various customers. 2012 irs income tax forms Maureen cannot use the standard mileage rate for the car or the vans. 2012 irs income tax forms This is because all five vehicles are used in Maureen's business at the same time. 2012 irs income tax forms She must use actual expenses for all vehicles. 2012 irs income tax forms Interest. 2012 irs income tax forms   If you are an employee, you cannot deduct any interest paid on a car loan. 2012 irs income tax forms This applies even if you use the car 100% for business as an employee. 2012 irs income tax forms   However, if you are self-employed and use your car in your business, you can deduct that part of the interest expense that represents your business use of the car. 2012 irs income tax forms For example, if you use your car 60% for business, you can deduct 60% of the interest on Schedule C (Form 1040). 2012 irs income tax forms You cannot deduct the part of the interest expense that represents your personal use of the car. 2012 irs income tax forms    If you use a home equity loan to purchase your car, you may be able to deduct the interest. 2012 irs income tax forms See Publication 936, Home Mortgage Interest Deduction, for more information. 2012 irs income tax forms Personal property taxes. 2012 irs income tax forms   If you itemize your deductions on Schedule A (Form 1040), you can deduct on line 7 state and local personal property taxes on motor vehicles. 2012 irs income tax forms You can take this deduction even if you use the standard mileage rate or if you do not use the car for business. 2012 irs income tax forms   If you are self-employed and use your car in your business, you can deduct the business part of state and local personal property taxes on motor vehicles on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040). 2012 irs income tax forms If you itemize your deductions, you can include the remainder of your state and local personal property taxes on the car on Schedule A (Form 1040). 2012 irs income tax forms Parking fees and tolls. 2012 irs income tax forms   In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. 2012 irs income tax forms (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses. 2012 irs income tax forms ) Sale, trade-in, or other disposition. 2012 irs income tax forms   If you sell, trade in, or otherwise dispose of your car, you may have a gain or loss on the transaction or an adjustment to the basis of your new car. 2012 irs income tax forms See Disposition of a Car , later. 2012 irs income tax forms Actual Car Expenses If you do not use the standard mileage rate, you may be able to deduct your actual car expenses. 2012 irs income tax forms If you qualify to use both methods, you may want to figure your deduction both ways to see which gives you a larger deduction. 2012 irs income tax forms Actual car expenses include: Depreciation Licenses Lease  payments Registration  fees Gas Insurance Repairs Oil Garage rent Tires Tolls Parking fees   If you have fully depreciated a car that you still use in your business, you can continue to claim your other actual car expenses. 2012 irs income tax forms Continue to keep records, as explained later in chapter 5 . 2012 irs income tax forms Business and personal use. 2012 irs income tax forms   If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. 2012 irs income tax forms You can divide your expense based on the miles driven for each purpose. 2012 irs income tax forms Example. 2012 irs income tax forms You are a sales representative for a clothing firm and drive your car 20,000 miles during the year: 12,000 miles for business and 8,000 miles for personal use. 2012 irs income tax forms You can claim only 60% (12,000 ÷ 20,000) of the cost of operating your car as a business expense. 2012 irs income tax forms Employer-provided vehicle. 2012 irs income tax forms   If you use a vehicle provided by your employer for business purposes, you can deduct your actual unreimbursed car expenses. 2012 irs income tax forms You cannot use the standard mileage rate. 2012 irs income tax forms See Vehicle Provided by Your Employer in chapter 6. 2012 irs income tax forms Interest on car loans. 2012 irs income tax forms   If you are an employee, you cannot deduct any interest paid on a car loan. 2012 irs income tax forms This interest is treated as personal interest and is not deductible. 2012 irs income tax forms If you are self-employed and use your car in that business, see Interest , earlier, under Standard Mileage Rate. 2012 irs income tax forms Taxes paid on your car. 2012 irs income tax forms   If you are an employee, you can deduct personal property taxes paid on your car if you itemize deductions. 2012 irs income tax forms Enter the amount paid on line 7 of Schedule A (Form 1040). 2012 irs income tax forms Sales taxes. 2012 irs income tax forms   Generally, sales taxes on your car are part of your car's basis and are recovered through depreciation, discussed later. 2012 irs income tax forms Fines and collateral. 2012 irs income tax forms   You cannot deduct fines you pay or collateral you forfeit for traffic violations. 2012 irs income tax forms Casualty and theft losses. 2012 irs income tax forms   If your car is damaged, destroyed, or stolen, you may be able to deduct part of the loss not covered by insurance. 2012 irs income tax forms See Publication 547, Casualties, Disasters, and Thefts, for information on deducting a loss on your car. 2012 irs income tax forms Depreciation and section 179 deductions. 2012 irs income tax forms   Generally, the cost of a car, plus sales tax and improvements, is a capital expense. 2012 irs income tax forms Because the benefits last longer than 1 year, you generally cannot deduct a capital expense. 2012 irs income tax forms However, you can recover this cost through the section 179 deduction (the deduction allowed by section 179 of the Internal Revenue Code), special depreciation allowance, and depreciation deductions. 2012 irs income tax forms Depreciation allows you to recover the cost over more than 1 year by deducting part of it each year. 2012 irs income tax forms The section 179 deduction , special depreciation allowance , and depreciation deductions are discussed later. 2012 irs income tax forms   Generally, there are limits on these deductions. 2012 irs income tax forms Special rules apply if you use your car 50% or less in your work or business. 2012 irs income tax forms   You can claim a section 179 deduction and use a depreciation method other than straight line only if you do not use the standard mileage rate to figure your business-related car expenses in the year you first place a car in service. 2012 irs income tax forms   If, in the year you first place a car in service, you claim either a section 179 deduction or use a depreciation method other than straight line for its estimated useful life, you cannot use the standard mileage rate on that car in any future year. 2012 irs income tax forms Car defined. 2012 irs income tax forms   For depreciation purposes, a car is any four-wheeled vehicle (including a truck or van) made primarily for use on public streets, roads, and highways. 2012 irs income tax forms Its unloaded gross vehicle weight must not be more than 6,000 pounds. 2012 irs income tax forms A car includes any part, component, or other item physically attached to it or usually included in the purchase price. 2012 irs income tax forms   A car does not include: An ambulance, hearse, or combination ambulance-hearse used directly in a business, A vehicle used directly in the business of transporting persons or property for pay or hire, or A truck or van that is a qualified nonpersonal use vehicle. 2012 irs income tax forms Qualified nonpersonal use vehicles. 2012 irs income tax forms   These are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. 2012 irs income tax forms They include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. 2012 irs income tax forms Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat, are qualified nonpersonal use vehicles. 2012 irs income tax forms More information. 2012 irs income tax forms   See Depreciation Deduction , later, for more information on how to depreciate your vehicle. 2012 irs income tax forms Section 179 Deduction The section 179 deduction allows you to treat a portion or all of the cost of a car as a current expense. 2012 irs income tax forms If you choose to deduct all or part of the cost as a current expense, you must reduce your depreciable basis in the car by the amount of the section 179 deduction. 2012 irs income tax forms There is a limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars, trucks, and vans that may reduce or eliminate any benefit from claiming the section 179 deduction. 2012 irs income tax forms See Depreciation Limits, later. 2012 irs income tax forms You can claim the section 179 deduction only in the year you place the car in service. 2012 irs income tax forms For this purpose, a car is placed in service when it is ready and available for a specifically assigned use, whether in a trade or business, a tax-exempt activity, a personal activity, or for the production of income. 2012 irs income tax forms Even if you are not using the property, it is in service when it is ready and available for its specifically assigned use. 2012 irs income tax forms A car first used for personal purposes cannot qualify for the deduction in a later year when its use changes to business. 2012 irs income tax forms Example. 2012 irs income tax forms In 2012, you bought a new car and used it for personal purposes. 2012 irs income tax forms In 2013, you began to use it for business. 2012 irs income tax forms Changing its use to business use does not qualify the cost of your car for a section 179 deduction in 2013. 2012 irs income tax forms However, you can claim a depreciation deduction for the business use of the car starting in 2013. 2012 irs income tax forms See Depreciation Deduction , later. 2012 irs income tax forms More than 50% business use requirement. 2012 irs income tax forms   You must use the property more than 50% for business to claim any section 179 deduction. 2012 irs income tax forms If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. 2012 irs income tax forms The result is the cost of the property that can qualify for the section 179 deduction. 2012 irs income tax forms Example. 2012 irs income tax forms Peter purchased a car in April 2013 for $24,500 and used it 60% for business. 2012 irs income tax forms Based on his business usage, the total cost of Peter's car that qualifies for the section 179 deduction is $14,700 ($24,500 cost × 60% business use). 2012 irs income tax forms But see Limit on total section 179, special depreciation allowance, and depreciation deduction , discussed later. 2012 irs income tax forms Limits. 2012 irs income tax forms   There are limits on: The amount of the section 179 deduction, The section 179 deduction for sport utility and certain other vehicles, and The total amount of the section 179 deduction, special depreciation allowance, and depreciation deduction (discussed later ) you can claim for a qualified property. 2012 irs income tax forms Limit on the amount of the section 179 deduction. 2012 irs income tax forms   For 2013, the total amount you can choose to deduct under section 179 generally cannot be more than $500,000. 2012 irs income tax forms   If the cost of your section 179 property placed in service in 2013 is over $2,000,000, you must reduce the $500,000 dollar limit (but not below zero) by the amount of cost over $2,000,000. 2012 irs income tax forms If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 deduction. 2012 irs income tax forms   The total amount you can deduct under section 179 each year after you apply the limits listed above cannot be more than the taxable income from the active conduct of any trade or business during the year. 2012 irs income tax forms   If you are married and file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. 2012 irs income tax forms   If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit. 2012 irs income tax forms You must allocate the dollar limit (after any reduction) between you. 2012 irs income tax forms   For more information on the above section 179 deduction limits, see Publication 946. 2012 irs income tax forms Limit for sport utility and certain other vehicles. 2012 irs income tax forms   For sport utility and certain other vehicles placed in service in 2013, the portion of the vehicle's cost taken into account in figuring your section 179 deduction is limited to $25,000. 2012 irs income tax forms This rule applies to any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is not subject to any of the passenger automobile limits explained under Depreciation Limits , later, and that is rated at no more than 14,000 pounds gross vehicle weight. 2012 irs income tax forms However, the $25,000 limit does not apply to any vehicle: Designed to have a seating capacity of more than nine persons behind the driver's seat, Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or That has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. 2012 irs income tax forms    Limit on total section 179, special depreciation allowance, and depreciation deduction. 2012 irs income tax forms   Generally, the total amount of section 179, special depreciation allowance, and depreciation deduction you can claim for a car that is qualified property and that you placed in service in 2013 is $11,160. 2012 irs income tax forms The limit is reduced if your business use of the car is less than 100%. 2012 irs income tax forms See Depreciation Limits , later, for more information. 2012 irs income tax forms Example. 2012 irs income tax forms In the earlier example under More than 50% business use requirement, Peter had a car with a cost (for purposes of the section 179 deduction) of $14,700. 2012 irs income tax forms However, based on Peter's business usage of his car, the total of his section 179, special depreciation allowance, and depreciation deductions is limited to $6,696 ($11,160 limit x 60% business use). 2012 irs income tax forms Cost of car. 2012 irs income tax forms   For purposes of the section 179 deduction, the cost of the car does not include any amount figured by reference to any other property held by you at any time. 2012 irs income tax forms For example, if you buy (for cash and a trade-in) a new car to use in your business, your cost for purposes of the section 179 deduction does not include your adjusted basis in the car you trade in for the new car. 2012 irs income tax forms Your cost includes only the cash you paid. 2012 irs income tax forms Basis of car for depreciation. 2012 irs income tax forms   The amount of the section 179 deduction reduces your basis in your car. 2012 irs income tax forms If you choose the section 179 deduction, you must subtract the amount of the deduction from the cost of your car. 2012 irs income tax forms The resulting amount is the basis in your car you use to figure your depreciation deduction. 2012 irs income tax forms When to choose. 2012 irs income tax forms   If you want to take the section 179 deduction, you must make the choice in the tax year you place the car in service for business or work. 2012 irs income tax forms How to choose. 2012 irs income tax forms    Employees use Form 2106 to make this choice and report the section 179 deduction. 2012 irs income tax forms All others use Form 4562. 2012 irs income tax forms   File the appropriate form with either of the following. 2012 irs income tax forms Your original tax return filed for the year the property was placed in service (whether or not you file it timely). 2012 irs income tax forms An amended return filed within the time prescribed by law. 2012 irs income tax forms An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. 2012 irs income tax forms The amended return must also include any resulting adjustments to taxable income. 2012 irs income tax forms    You must keep records that show the specific identification of each piece of qualifying section 179 property. 2012 irs income tax forms These records must show how you acquired the property, the person you acquired it from, and when you placed it in service. 2012 irs income tax forms Revoking an election. 2012 irs income tax forms   An election (or any specification made in the election) to take a section 179 deduction for 2013 can only be revoked with the Commissioner's approval. 2012 irs income tax forms Recapture of section 179 deduction. 2012 irs income tax forms   To be eligible to claim the section 179 deduction, you must use your car more than 50% for business or work in the year you acquired it. 2012 irs income tax forms If your business use of the car is 50% or less in a later tax year during the recovery period, you have to recapture (include in income) in that later year any excess depreciation. 2012 irs income tax forms Any section 179 deduction claimed on the car is included in calculating the excess depreciation. 2012 irs income tax forms For information on this calculation, see Excess depreciation , later in this chapter under Car Used 50% or Less for Business. 2012 irs income tax forms Dispositions. 2012 irs income tax forms   If you dispose of a car on which you had claimed the section 179 deduction, the amount of that deduction is treated as a depreciation deduction for recapture purposes. 2012 irs income tax forms You treat any gain on the disposition of the property as ordinary income up to the amount of the section 179 deduction and any allowable depreciation (unless you establish the amount actually allowed). 2012 irs income tax forms For information on the disposition of a car, see Disposition of a Car , later. 2012 irs income tax forms Special Depreciation Allowance You may be able to claim the special depreciation allowance for your car, truck, or van, if it is qualified property and was placed in service in 2013. 2012 irs income tax forms The allowance is an additional depreciation deduction of 50% of the car's depreciable basis (after any section 179 deduction, but before figuring your regular depreciation deduction under MACRS). 2012 irs income tax forms The special depreciation allowance applies only for the first year the car is placed in service. 2012 irs income tax forms To qualify for the allowance more than 50% of the use of the car must be in a qualified business use (as defined under Depreciation Deduction, later). 2012 irs income tax forms Combined depreciation. 2012 irs income tax forms   Your combined section 179 deduction, special depreciation allowance, and regular MACRS depreciation deduction is limited to the maximum allowable depreciation deduction for cars of $11,160 ($3,160 if you elect not to claim the special depreciation allowance). 2012 irs income tax forms For trucks and vans, the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). 2012 irs income tax forms See Depreciation Limits , later in this chapter. 2012 irs income tax forms Qualified car. 2012 irs income tax forms   To be a qualified car (including trucks and vans), the car must meet all of the following tests. 2012 irs income tax forms You purchased the car new on or after January 1, 2008, but only if no binding written contract to acquire the car existed before January 1, 2008, You placed the car in service in your trade or business before January 1, 2014, You used the car more than 50% in a qualified business use. 2012 irs income tax forms Election not to claim the special depreciation allowance. 2012 irs income tax forms   You can elect not to claim the special depreciation allowance for your car, truck, or van, that is qualified property. 2012 irs income tax forms If you make this election, it applies to all 5-year property placed in service during the year. 2012 irs income tax forms   To make the election, attach a statement to your timely filed return (including extensions) indicating the class of property (5-year for cars) for which you are making the election and that you are electing not to claim the special depreciation allowance for qualified property acquired on or after January 1, 2008. 2012 irs income tax forms    Unless you elect not to claim the special depreciation allowance, you must reduce the car's adjusted basis by the amount of the allowance, even if the allowance was not claimed. 2012 irs income tax forms Depreciation Deduction If you use actual car expenses to figure your deduction for a car you own and use in your business, you can claim a depreciation deduction. 2012 irs income tax forms This means you can deduct a certain amount each year as a recovery of your cost or other basis in your car. 2012 irs income tax forms You generally need to know the following things about the car you intend to depreciate. 2012 irs income tax forms Your basis in the car. 2012 irs income tax forms The date you place the car in service. 2012 irs income tax forms The method of depreciation and recovery period you will use. 2012 irs income tax forms Basis. 2012 irs income tax forms   Your basis in a car for figuring depreciation is generally its cost. 2012 irs income tax forms This includes any amount you borrow or pay in cash, other property, or services. 2012 irs income tax forms   Generally, you figure depreciation on your car, truck, or van using your unadjusted basis (see Unadjusted basis , later). 2012 irs income tax forms However, in some situations you will use your adjusted basis (your basis reduced by depreciation allowed or allowable in earlier years). 2012 irs income tax forms For one of these situations see Exception under Methods of depreciation, later. 2012 irs income tax forms   If you change the use of a car from personal to business, your basis for depreciation is the lesser of the fair market value or your adjusted basis in the car on the date of conversion. 2012 irs income tax forms Additional rules concerning basis are discussed later in this chapter under Unadjusted basis . 2012 irs income tax forms Placed in service. 2012 irs income tax forms   You generally place a car in service when it is available for use in your work or business, in an income-producing activity, or in a personal activity. 2012 irs income tax forms Depreciation begins when the car is placed in service for use in your work or business or for the production of income. 2012 irs income tax forms   For purposes of computing depreciation, if you first start using the car only for personal use and later convert it to business use, you place the car in service on the date of conversion. 2012 irs income tax forms Car placed in service and disposed of in the same year. 2012 irs income tax forms   If you place a car in service and dispose of it in the same tax year, you cannot claim any depreciation deduction for that car. 2012 irs income tax forms Methods of depreciation. 2012 irs income tax forms   Generally, you figure depreciation on cars using the Modified Accelerated Cost Recovery System (MACRS). 2012 irs income tax forms MACRS is discussed later in this chapter. 2012 irs income tax forms Exception. 2012 irs income tax forms   If you used the standard mileage rate in the first year of business use and change to the actual expenses method in a later year, you cannot depreciate your car under the MACRS rules. 2012 irs income tax forms You must use straight line depreciation over the estimated remaining useful life of the car. 2012 irs income tax forms   To figure depreciation under the straight line method, you must reduce your basis in the car (but not below zero) by a set rate per mile for all miles for which you used the standard mileage rate. 2012 irs income tax forms The rate per mile varies depending on the year(s) you used the standard mileage rate. 2012 irs income tax forms For the rate(s) to use, see Depreciation adjustment when you used the standard mileage rate under Disposition of a Car, later. 2012 irs income tax forms   This reduction of basis is in addition to those basis adjustments described later under Unadjusted basis . 2012 irs income tax forms You must use your adjusted basis in your car to figure your depreciation deduction. 2012 irs income tax forms For additional information on the straight line method of depreciation, see Publication 946. 2012 irs income tax forms More-than-50%-use test. 2012 irs income tax forms   Generally, you must use your car more than 50% for qualified business use (defined next) during the year to use MACRS. 2012 irs income tax forms You must meet this more-than-50%-use test each year of the recovery period (6 years under MACRS) for your car. 2012 irs income tax forms   If your business use is 50% or less, you must use the straight line method to depreciate your car. 2012 irs income tax forms This is explained later under Car Used 50% or Less for Business . 2012 irs income tax forms Qualified business use. 2012 irs income tax forms   A qualified business use is any use in your trade or business. 2012 irs income tax forms It does not include use for the production of income (investment use). 2012 irs income tax forms However, you do combine your business and investment use to compute your depreciation deduction for the tax year. 2012 irs income tax forms Use of your car by another person. 2012 irs income tax forms   Do not treat any use of your car by another person as use in your trade or business unless that use meets one of the following conditions. 2012 irs income tax forms It is directly connected with your business. 2012 irs income tax forms It is properly reported by you as income to the other person (and, if you have to, you withhold tax on the income). 2012 irs income tax forms It results in a payment of fair market rent. 2012 irs income tax forms This includes any payment to you for the use of your car. 2012 irs income tax forms Business use changes. 2012 irs income tax forms   If you used your car more than 50% in qualified business use in the year you placed it in service, but 50% or less in a later year (including the year of disposition), you have to change to the straight line method of depreciation. 2012 irs income tax forms See Qualified business use 50% or less in a later year under Car Used 50% or Less for Business, later. 2012 irs income tax forms    Property does not cease to be used more than 50% in qualified business use by reason of a transfer at death. 2012 irs income tax forms Use for more than one purpose. 2012 irs income tax forms   If you use your car for more than one purpose during the tax year, you must allocate the use to the various purposes. 2012 irs income tax forms You do this on the basis of mileage. 2012 irs income tax forms Figure the percentage of qualified business use by dividing the number of miles you drive your car for business purposes during the year by the total number of miles you drive the car during the year for any purpose. 2012 irs income tax forms Change from personal to business use. 2012 irs income tax forms   If you change the use of a car from 100% personal use to business use during the tax year, you may not have mileage records for the time before the change to business use. 2012 irs income tax forms In this case, you figure the percentage of business use for the year as follows. 2012 irs income tax forms Determine the percentage of business use for the period following the change. 2012 irs income tax forms Do this by dividing business miles by total miles driven during that period. 2012 irs income tax forms Multiply the percentage in (1) by a fraction. 2012 irs income tax forms The numerator (top number) is the number of months the car is used for business and the denominator (bottom number) is 12. 2012 irs income tax forms Example. 2012 irs income tax forms You use a car only for personal purposes during the first 6 months of the year. 2012 irs income tax forms During the last 6 months of the year, you drive the car a total of 15,000 miles of which 12,000 miles are for business. 2012 irs income tax forms This gives you a business use percentage of 80% (12,000 ÷ 15,000) for that period. 2012 irs income tax forms Your business use for the year is 40% (80% × 6/12). 2012 irs income tax forms Limits. 2012 irs income tax forms   The amount you can claim for section 179, special depreciation allowance, and depreciation deductions may be limited. 2012 irs income tax forms The maximum amount you can claim depends on the year in which you placed your car in service. 2012 irs income tax forms You have to reduce the maximum amount if you did not use the car exclusively for business. 2012 irs income tax forms See Depreciation Limits , later. 2012 irs income tax forms Unadjusted basis. 2012 irs income tax forms   You use your unadjusted basis (often referred to as your basis or your basis for depreciation) to figure your depreciation using the MACRS depreciation chart, explained later under Modified Accelerated Cost Recovery System (MACRS) . 2012 irs income tax forms Your unadjusted basis for figuring depreciation is your original basis increased or decreased by certain amounts. 2012 irs income tax forms   To figure your unadjusted basis, begin with your car's original basis, which generally is its cost. 2012 irs income tax forms Cost includes sales taxes (see Sales taxes , earlier), destination charges, and dealer preparation. 2012 irs income tax forms Increase your basis by any substantial improvements you make to your car, such as adding air conditioning or a new engine. 2012 irs income tax forms Decrease your basis by any section 179 deduction, special depreciation allowance, gas guzzler tax, clean-fuel vehicle deduction (for vehicles placed in service before Jan. 2012 irs income tax forms 1, 2006), and alternative motor vehicle credit. 2012 irs income tax forms   See Form 8910 for information on the alternative motor vehicle credit. 2012 irs income tax forms If your business use later falls to 50% or less, you may have to recapture (include in your income) any excess depreciation. 2012 irs income tax forms See Car Used 50% or Less for Business, later, for more information. 2012 irs income tax forms If you acquired the car by gift or inheritance, see Publication 551, Basis of Assets, for information on your basis in the car. 2012 irs income tax forms Improvements. 2012 irs income tax forms   A major improvement to a car is treated as a new item of 5-year recovery property. 2012 irs income tax forms It is treated as placed in service in the year the improvement is made. 2012 irs income tax forms It does not matter how old the car is when the improvement is added. 2012 irs income tax forms Follow the same steps for depreciating the improvement as you would for depreciating the original cost of the car. 2012 irs income tax forms However, you must treat the improvement and the car as a whole when applying the limits on the depreciation deductions. 2012 irs income tax forms Your car's depreciation deduction for the year (plus any section 179 deduction, special depreciation allowance, and depreciation on any improvements) cannot be more than the depreciation limit that applies for that year. 2012 irs income tax forms See Depreciation Limits , later. 2012 irs income tax forms Car trade-in. 2012 irs income tax forms   If you traded one car (the “old car”) for another car (the “new car”) in 2013, there are two ways you can treat the transaction. 2012 irs income tax forms You can elect to treat the transaction as a tax-free disposition of the old car and the purchase of the new car. 2012 irs income tax forms If you make this election, you treat the old car as disposed of at the time of the trade-in. 2012 irs income tax forms The depreciable basis of the new car is the adjusted basis of the old car (figured as if 100% of the car's use had been for business purposes) plus any additional amount you paid for the new car. 2012 irs income tax forms You then figure your depreciation deduction for the new car beginning with the date you placed it in service. 2012 irs income tax forms You make this election by completing Form 2106, Part II, Section D. 2012 irs income tax forms This method is explained later, beginning at Effect of trade-in on basis . 2012 irs income tax forms If you do not make the election described in (1), you must figure depreciation separately for the remaining basis of the old car and for any additional amount you paid for the new car. 2012 irs income tax forms You must apply two depreciation limits (see Depreciation Limits , later). 2012 irs income tax forms The limit that applies to the remaining basis of the old car generally is the amount that would have been allowed had you not traded in the old car. 2012 irs income tax forms The limit that applies to the additional amount you paid for the new car generally is the limit that applies for the tax year, reduced by the depreciation allowance for the remaining basis of the old car. 2012 irs income tax forms You must use Form 4562 to compute your depreciation deduction. 2012 irs income tax forms You cannot use Form 2106, Part II, Section D. 2012 irs income tax forms This method is explained in Publication 946. 2012 irs income tax forms   If you elect to use the method described in (1), you must do so on a timely filed tax return (including extensions). 2012 irs income tax forms Otherwise, you must use the method described in (2). 2012 irs income tax forms Effect of trade-in on basis. 2012 irs income tax forms   The discussion that follows applies to trade-ins of cars in 2013, where the election was made to treat the transaction as a tax-free disposition of the old car and the purchase of the new car. 2012 irs income tax forms For information on how to figure depreciation for cars involved in a like-kind exchange (trade-in) in 2013, for which the election was not made, see Publication 946 and Regulations section 1. 2012 irs income tax forms 168(i)-6(d)(3). 2012 irs income tax forms Traded car used only for business. 2012 irs income tax forms   If you trade in a car you used only in your business for another car that will be used only in your business, your original basis in the new car is your adjusted basis in the old car, plus any additional amount you pay for the new car. 2012 irs income tax forms Example. 2012 irs income tax forms Paul trades in a car that has an adjusted basis of $5,000 for a new car. 2012 irs income tax forms In addition, he pays cash of $20,000 for the new car. 2012 irs income tax forms His original basis of the new car is $25,000 (his $5,000 adjusted basis in the old car plus the $20,000 cash paid). 2012 irs income tax forms Paul's unadjusted basis is $25,000 unless he claims the section 179 deduction, special depreciation allowance, or has other increases or decreases to his original basis, discussed under Unadjusted basis , earlier. 2012 irs income tax forms Traded car used partly in business. 2012 irs income tax forms   If you trade in a car you used partly in your business for a new car you will use in your business, you must make a “trade-in” adjustment for the personal use of the old car. 2012 irs income tax forms This adjustment has the effect of reducing your basis in your old car, but not below zero, for purposes of figuring your depreciation deduction for the new car. 2012 irs income tax forms (This adjustment is not used, however, when you determine the gain or loss on the later disposition of the new car. 2012 irs income tax forms See Publication 544, Sales and Other Dispositions of Assets, for information on how to report the disposition of your car. 2012 irs income tax forms )   To figure the unadjusted basis of your new car for depreciation, first add to your adjusted basis in the old car any additional amount you pay for the new car. 2012 irs income tax forms Then subtract from that total the excess, if any, of: The total of the amounts that would have been allowable as depreciation during the tax years before the trade if 100% of the use of the car had been business and investment use, over The total of the amounts actually allowed as depreciation during those years. 2012 irs income tax forms For information about figuring depreciation, see Modified Accelerated Cost Recovery System (MACRS) , which follows Example 2, later. 2012 irs income tax forms Modified Accelerated Cost Recovery System (MACRS). 2012 irs income tax forms   The Modified Accelerated Cost Recovery System (MACRS) is the name given to the tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. 2012 irs income tax forms   The maximum amount you can deduct is limited, depending on the year you placed your car in service. 2012 irs income tax forms See Depreciation Limits , later. 2012 irs income tax forms Recovery period. 2012 irs income tax forms   Under MACRS, cars are classified as 5-year property. 2012 irs income tax forms You actually depreciate the cost of a car, truck, or van over a period of 6 calendar years. 2012 irs income tax forms This is because your car is generally treated as placed in service in the middle of the year, and you claim depreciation for one-half of both the first year and the sixth year. 2012 irs income tax forms Depreciation deduction for certain Indian reservation property. 2012 irs income tax forms   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations after 1993 and before 2014. 2012 irs income tax forms The recovery that applies for a business-use car is 3 years instead of 5 years. 2012 irs income tax forms However, the depreciation limits, discussed later, will still apply. 2012 irs income tax forms   For more information on the qualifications for this shorter recovery period and the percentages to use in figuring the depreciation deduction, see chapter 4 of Publication 946. 2012 irs income tax forms Depreciation methods. 2012 irs income tax forms   You can use one of the following methods to depreciate your car. 2012 irs income tax forms The 200% declining balance method (200% DB) over a 5-year recovery period that switches to the straight line method when that method provides an equal or greater deduction. 2012 irs income tax forms The 150% declining balance method (150% DB) over a 5-year recovery period that switches to the straight line method when that method provides an equal or greater deduction. 2012 irs income tax forms The straight line method (SL) over a 5-year recovery period. 2012 irs income tax forms    If you use Table 4-1 (discussed later under MACRS depreciation chart) to determine your depreciation rate for 2013, you do not need to determine in what year using the straight line method provides an equal or greater deduction. 2012 irs income tax forms This is because the chart has the switch to the straight line method built into its rates. 2012 irs income tax forms   Before choosing a method, you may wish to consider the following facts. 2012 irs income tax forms Using the straight line method provides equal yearly deductions throughout the recovery period. 2012 irs income tax forms Using the declining balance methods provides greater deductions during the earlier recovery years with the deductions generally getting smaller each year. 2012 irs income tax forms MACRS depreciation chart. 2012 irs income tax forms   A 2013 MACRS Depreciation Chart and instructions are included in this chapter as Table 4-1 . 2012 irs income tax forms Using this table will make it easy for you to figure the 2013 depreciation deduction for your car. 2012 irs income tax forms A similar chart appears in the Instructions for Form 2106. 2012 irs income tax forms    You may have to use the tables in Publication 946 instead of using this MACRS Depreciation Chart. 2012 irs income tax forms   You must use the Depreciation Tables in Publication 946 rather than the 2013 MACRS Depreciation Chart in this publication if any one of the following four conditions applies to you. 2012 irs income tax forms You file your return on a fiscal year basis. 2012 irs income tax forms You file your return for a short tax year (less than 12 months). 2012 irs income tax forms During the year, all of the following conditions apply. 2012 irs income tax forms You placed some property in service from January through September. 2012 irs income tax forms You placed some property in service from October through December. 2012 irs income tax forms Your basis in the property you placed in service from October through December (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) was more than 40% of your total bases in all property you placed in service during the year. 2012 irs income tax forms   You placed qualified property in service on an Indian reservation. 2012 irs income tax forms Depreciation in future years. 2012 irs income tax forms   If you use the percentages from the chart, you generally must continue to use them for the entire recovery period of your car. 2012 irs income tax forms However, you cannot continue to use the chart if your basis in your car is adjusted because of a casualty. 2012 irs income tax forms In that case, for the year of the adjustment and the remaining recovery period, figure the depreciation without the chart using your adjusted basis in the car at the end of the year of the adjustment and over the remaining recovery period. 2012 irs income tax forms See Figuring the Deduction Without Using the Tables in chapter 4 of Publication 946. 2012 irs income tax forms    In future years, do not use the chart in this edition of the publication. 2012 irs income tax forms Instead, use the chart in the publication or the form instructions for those future years. 2012 irs income tax forms Disposition of car during recovery period. 2012 irs income tax forms   If you dispose of the car before the end of the recovery period, you are generally allowed a half year of depreciation in the year of disposition unless you purchased the car during the last quarter of a year. 2012 irs income tax forms See Depreciation deduction for the year of disposition under Disposition of a Car, later, for information on how to figure the depreciation allowed in the year of disposition. 2012 irs income tax forms How to use the 2013 chart. 2012 irs income tax forms   To figure your depreciation deduction for 2013, find the percentage in the column of Table 4-1 based on the date that you first placed the car in service and the depreciation method that you are using. 2012 irs income tax forms Multiply the unadjusted basis of your car (defined earlier) by that percentage to determine the amount of your depreciation deduction. 2012 irs income tax forms If you prefer to figure your depreciation deduction without the help of the chart, see Publication 946. 2012 irs income tax forms    Your deduction cannot be more than the maximum depreciation limit for cars. 2012 irs income tax forms See Depreciation Limits, later. 2012 irs income tax forms Example. 2012 irs income tax forms Phil bought a used truck in February 2012 to use exclusively in his landscape business. 2012 irs income tax forms He paid $9,200 for the truck with no trade-in. 2012 irs income tax forms Phil did not claim any section 179 deduction, the truck did not qualify for the special depreciation allowance, and he chose to use the 200% DB method to get the largest depreciation deduction in the early years. 2012 irs income tax forms Phil used the MACRS depreciation chart in 2012 to find his percentage. 2012 irs income tax forms The unadjusted basis of his truck equals its cost because Phil used it exclusively for business. 2012 irs income tax forms He multiplied the unadjusted basis of his truck, $9,200, by the percentage that applied, 20%, to figure his 2012 depreciation deduction of $1,840. 2012 irs income tax forms In 2013, Phil used the truck for personal purposes when he repaired his father's cabin. 2012 irs income tax forms His records show that the business use of his truck was 90% in 2013. 2012 irs income tax forms Phil used Table 4-1 to find his percentage. 2012 irs income tax forms Reading down the first column for the date placed in service and across to the 200% DB column, he locates his percentage, 32%. 2012 irs income tax forms He multiplies the unadjusted basis of his truck, $8,280 ($9,200 cost × 90% business use), by 32% to figure his 2013 depreciation deduction of $2,650. 2012 irs income tax forms Depreciation Limits There are limits on the amount you can deduct for depreciation of your car, truck, or van. 2012 irs income tax forms The section 179 deduction and special depreciation allowance are treated as depreciation for purposes of the limits. 2012 irs income tax forms The maximum amount you can deduct each year depends on the year you place the car in service. 2012 irs income tax forms These limits are shown in the following tables. 2012 irs income tax forms   Maximum Depreciation Deduction for Cars Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2012–2013 $11,1601 $5,100 $3,050 $1,875 2010–2011 11,0602 4,900 2,950 1,775 2008–2009 10,9603 4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6103 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7104 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6605 4,900 2,950 1,775 2001–2002 7,6605 4,900 2,950 1,775 2000 3,060 4,900 2,950 1,775 1$3,160 if the car is not qualified property or if you elect not to claim the special depreciation allowance. 2012 irs income tax forms 2$3,060 if the car is not qualified property or if you elect not to claim the special depreciation allowance. 2012 irs income tax forms 3$2,960 if the car is not qualified property or if you elect not to claim the special depreciation allowance. 2012 irs income tax forms 4$7,660 if you acquired the car before 5/6/2003. 2012 irs income tax forms $3,060 if the car is not qualified property or if you elect not to claim any special depreciation allowance. 2012 irs income tax forms 5$3,060 if you acquired the car before 9/11/2001, the car is not qualified property, or you elect not to claim the special depreciation allowance. 2012 irs income tax forms Trucks and vans. 2012 irs income tax forms   For 2013, the maximum depreciation deductions for trucks and vans are generally higher than those for cars. 2012 irs income tax forms A truck or van is a passenger automobile that is classified by the manufacturer as a truck or van and rated at 6,000 pounds gross vehicle weight or less. 2012 irs income tax forms For trucks and vans placed in service before 2003, use the Maximum Depreciation Deduction for Cars table. 2012 irs income tax forms Maximum Depreciation Deduction for Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 $11,3601 $5,300 $3,150 $1,875 2011 11,2601 5,200 3,150 1,875 2010 11,1601 5,100 3,050 1,875 2009 11,0601 4,900 2,950 1,775 2008 11,1601 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2005–2006 3,260 5,200 3,150 1,875 2004 10,9101 5,300 3,150 1,875 2003 11,0101,2 5,400 3,250 1,975 1If the special depreciation allowance does not apply or you make the election not to claim the special depreciation allowance, the first-year limit is $3,360 for 2012 and 2013, $3,260 for 2011, $3,160 for 2010, $3,060 for 2009, $3,160 for 2008, $3,260 for 2004, and $3,360 for 2003. 2012 irs income tax forms 2If the truck or van was acquired before 5/06/2003, the truck or van is qualified property, and you claim the special depreciation allowance for the truck or van, the maximum deduction is $7,960. 2012 irs income tax forms Car used less than full year. 2012 irs income tax forms   The depreciation limits are not reduced if you use a car for less than a full year. 2012 irs income tax forms This means that you do not reduce the limit when you either place a car in service or dispose of a car during the year. 2012 irs income tax forms However, the depreciation limits are reduced if you do not use the car exclusively for business and investment purposes. 2012 irs income tax forms See Reduction for personal use , next. 2012 irs income tax forms Reduction for personal use. 2012 irs income tax forms   The depreciation limits are reduced based on your percentage of personal use. 2012 irs income tax forms If you use a car less than 100% in your business or work, you must determine the depreciation deduction limit by multiplying the limit amount by the percentage of business and investment use during the tax year. 2012 irs income tax forms Section 179 deduction. 2012 irs income tax forms   The section 179 deduction is treated as a depreciation deduction. 2012 irs income tax forms If you place a car that is not a truck or van in service in 2013, use it only for business, and choose the section 179 deduction, the special depreciation allowance, and the depreciation deduction for that car for 2013 is limited to $11,160. 2012 irs income tax forms Example. 2012 irs income tax forms On September 4, 2013, Jack bought a used car for $10,000 and placed it in service. 2012 irs income tax forms He used it 80% for his business, and he chooses to take a section 179 deduction for the car. 2012 irs income tax forms The car is not qualified property for purposes of the special depreciation allowance. 2012 irs income tax forms Before applying the limit, Jack figures his maximum section 179 deduction to be $8,000. 2012 irs income tax forms This is the cost of his qualifying property (up to the maximum $500,000 amount) multiplied by his business use ($10,000 × 80%). 2012 irs income tax forms Jack then figures that his section 179 deduction for 2013 is limited to $2,528 (80% of $3,160). 2012 irs income tax forms He then figures his unadjusted basis of $5,472 (($10,000 × 80%) − $2,528) for determining his depreciation deduction. 2012 irs income tax forms Jack has reached his maximum depreciation deduction for 2013. 2012 irs income tax forms For 2014, Jack will use his unadjusted basis of $5,472 to figure his depreciation deduction. 2012 irs income tax forms Deductions in years after the recovery period. 2012 irs income tax forms   If the depreciation deductions for your car are reduced under the passenger automobile limits (discussed earlier), you will have unrecovered basis in your car at the end of the recovery period. 2012 irs income tax forms If you continue to use your car for business, you can deduct that unrecovered basis (subject to depreciation limits) after the recovery period ends. 2012 irs income tax forms Unrecovered basis. 2012 irs income tax forms   This is your cost or other basis in the car reduced by any clean-fuel vehicle deduction (for vehicles placed in service before January 1, 2006), alternative motor vehicle credit, electric vehicle credit, gas guzzler tax, and depreciation (including any special depreciation allowance , discussed earlier, unless you elect not to claim it) and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use. 2012 irs income tax forms The recovery period. 2012 irs income tax forms   For 5-year property, your recovery period is 6 calendar years. 2012 irs income tax forms A part year's depreciation is allowed in the first calendar year, a full year's depreciation is allowed in each of the next 4 calendar years, and a part year's depreciation is allowed in the 6th calendar year. 2012 irs income tax forms   Under MACRS, your recovery period is the same whether you use declining balance or straight line depreciation. 2012 irs income tax forms You determine your unrecovered basis in the 7th year after you placed the car in service. 2012 irs income tax forms How to treat unrecovered basis. 2012 irs income tax forms   If you continue to use your car for business after the recovery period, you can claim a depreciation deduction in each succeeding tax year until you recover your basis in the car. 2012 irs income tax forms The maximum amount you can deduct each year is determined by the date you placed the car in service and your business-use percentage. 2012 irs income tax forms For example, no deduction is allowed for a year you use your car 100% for personal purposes. 2012 irs income tax forms Example. 2012 irs income tax forms In April 2007, Bob bought and placed in service a car he used exclusively in his business. 2012 irs income tax forms The car cost $31,500. 2012 irs income tax forms Bob did not claim a section 179 deduction or the special depreciation allowance for the car. 2012 irs income tax forms He continued to use the car 100% in his business throughout the recovery period (2007 through 2012). 2012 irs income tax forms For those years, Bob used the MACRS Depreciation Chart (200% declining balance method) and the Maximum Depreciation Deduction for Cars table, earlier, for the applicable tax year to compute his depreciation deductions during the recovery period. 2012 irs income tax forms Bob's depreciation deductions were subject to the depreciation limits so he will have unrecovered basis at the end of the recovery period as shown in the following table. 2012 irs income tax forms      MACRS     Deprec. 2012 irs income tax forms Year % Amount Limit Allowed 2007 20. 2012 irs income tax forms 00 $6,300 $3,060 $ 3,060 2008 32. 2012 irs income tax forms 00 10,080 4,900 4,900 2009 19. 2012 irs income tax forms 20 6,048 2,850 2,850 2010 11. 2012 irs income tax forms 52 3,629 1,775 1,775 2011 11. 2012 irs income tax forms 52 3,629 1,775 1,775 2012 5. 2012 irs income tax forms 76 1,814 1,775 1,775 Total $31,500   16,135 For the correct limit, see Maximum Depreciation Deduction for Cars under “Depreciation Limits,” earlier, for the maximum amount of depreciation allowed each year. 2012 irs income tax forms   At the end of 2012, Bob had an unrecovered basis in the car of $15,365 ($31,500 – $16,135). 2012 irs income tax forms If Bob continued to use the car 100% for business in 2013 and later years, he can claim a depreciation deduction equal to the lesser of $1,775 or his remaining unrecovered basis. 2012 irs income tax forms   If Bob's business use of the car was less than 100% during any year, his depreciation deduction would be less than the maximum amount allowable for that year. 2012 irs income tax forms However, in determining his unrecovered basis in the car, he would still reduce his original basis by the maximum amount allowable as if the business use had been 100%. 2012 irs income tax forms For example, if Bob had used his car 60% for business instead of 100%, his allowable depreciation deductions would have been $9,681 ($16,135 × 60%), but he still would have to reduce his basis by $16,135 to determine his unrecovered basis. 2012 irs income tax forms Table 4-1. 2012 irs income tax forms 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. 2012 irs income tax forms ) If you claim actual expenses for your car, use the chart below to find the depreciation method and percentage to use for your 2013 return for cars placed in service in 2013. 2012 irs income tax forms   First, using the left column, find the date you first placed the car in service in 2013. 2012 irs income tax forms Then select the depreciation method and percentage from column (a), (b), or (c) following the rules explained in this chapter. 2012 irs income tax forms For cars placed in service before 2013, you must use the same method you used on last year's return unless a decline in your business use requires you to change to the straight line method. 2012 irs income tax forms Refer back to the MACRS Depreciation Chart for the year you placed the car in service. 2012 irs income tax forms (See Car Used 50% or Less for Business . 2012 irs income tax forms )  Multiply the unadjusted basis of your car by your business use percentage. 2012 irs income tax forms Multiply the result by the percentage you found in the chart to find the amount of your depreciation deduction for 2013. 2012 irs income tax forms (Also see Depreciation Limits . 2012 irs income tax forms )   If you placed your car in service after September of any year and you placed other business property in service during the same year, you may have to use the Jan. 2012 irs income tax forms 1—Sept. 2012 irs income tax forms 30 percentage instead of the Oct. 2012 irs income tax forms 1—Dec. 2012 irs income tax forms 31 percentage for your car. 2012 irs income tax forms               To find out if this applies to you, determine: 1) the basis of all business property you placed in service after September of that year and 2) the basis of all business property you placed in service during that entire year. 2012 irs income tax forms If the basis of the property placed in service after September is not more than 40% of the basis of all property (certain property is excluded) placed in service for the entire year, use the percentage for Jan. 2012 irs income tax forms 1—Sept. 2012 irs income tax forms 30 for figuring depreciation for your car. 2012 irs income tax forms See Which Convention Applies? in chapter 4 of Publication 946 for more details. 2012 irs income tax forms               Example. 2012 irs income tax forms You buy machinery (basis of $32,000) in May 2013 and a new van (basis of $20,000) in October 2013, both used 100% in your business. 2012 irs income tax forms You
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The 2012 Irs Income Tax Forms

2012 irs income tax forms 4. 2012 irs income tax forms   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. 2012 irs income tax forms  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. 2012 irs income tax forms For more information, see Publication 505. 2012 irs income tax forms Reminders Estimated tax safe harbor for higher income taxpayers. 2012 irs income tax forms  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. 2012 irs income tax forms Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. 2012 irs income tax forms In general, the federal income tax is a pay-as-you-go tax. 2012 irs income tax forms There are two ways to pay as you go. 2012 irs income tax forms Withholding. 2012 irs income tax forms If you are an employee, your employer probably withholds income tax from your pay. 2012 irs income tax forms Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. 2012 irs income tax forms The amount withheld is paid to the IRS in your name. 2012 irs income tax forms Estimated tax. 2012 irs income tax forms If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. 2012 irs income tax forms People who are in business for themselves generally will have to pay their tax this way. 2012 irs income tax forms Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. 2012 irs income tax forms Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. 2012 irs income tax forms This chapter explains these methods. 2012 irs income tax forms In addition, it also explains the following. 2012 irs income tax forms Credit for withholding and estimated tax. 2012 irs income tax forms When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. 2012 irs income tax forms , and for the estimated tax you paid for 2013. 2012 irs income tax forms Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). 2012 irs income tax forms Underpayment penalty. 2012 irs income tax forms If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. 2012 irs income tax forms In most cases, the IRS can figure this penalty for you. 2012 irs income tax forms See Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. 2012 irs income tax forms This section explains the rules for withholding tax from each of these types of income. 2012 irs income tax forms This section also covers backup withholding on interest, dividends, and other payments. 2012 irs income tax forms Salaries and Wages Income tax is withheld from the pay of most employees. 2012 irs income tax forms Your pay includes your regular pay, bonuses, commissions, and vacation allowances. 2012 irs income tax forms It also includes reimbursements and other expense allowances paid under a nonaccountable plan. 2012 irs income tax forms See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. 2012 irs income tax forms If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. 2012 irs income tax forms This is explained under Exemption From Withholding , later. 2012 irs income tax forms You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. 2012 irs income tax forms If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . 2012 irs income tax forms Military retirees. 2012 irs income tax forms   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. 2012 irs income tax forms Household workers. 2012 irs income tax forms   If you are a household worker, you can ask your employer to withhold income tax from your pay. 2012 irs income tax forms A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. 2012 irs income tax forms   Tax is withheld only if you want it withheld and your employer agrees to withhold it. 2012 irs income tax forms If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . 2012 irs income tax forms Farmworkers. 2012 irs income tax forms   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. 2012 irs income tax forms Differential wage payments. 2012 irs income tax forms    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. 2012 irs income tax forms Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. 2012 irs income tax forms The wages and withholding will be reported on Form W-2, Wage and Tax Statement. 2012 irs income tax forms   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. 2012 irs income tax forms Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. 2012 irs income tax forms The amount you earn in each payroll period. 2012 irs income tax forms The information you give your employer on Form W-4. 2012 irs income tax forms Form W-4 includes four types of information that your employer will use to figure your withholding. 2012 irs income tax forms Whether to withhold at the single rate or at the lower married rate. 2012 irs income tax forms How many withholding allowances you claim (each allowance reduces the amount withheld). 2012 irs income tax forms Whether you want an additional amount withheld. 2012 irs income tax forms Whether you are claiming an exemption from withholding in 2014. 2012 irs income tax forms See Exemption From Withholding , later. 2012 irs income tax forms Note. 2012 irs income tax forms You must specify a filing status and a number of withholding allowances on Form W-4. 2012 irs income tax forms You cannot specify only a dollar amount of withholding. 2012 irs income tax forms New Job When you start a new job, you must fill out Form W-4 and give it to your employer. 2012 irs income tax forms Your employer should have copies of the form. 2012 irs income tax forms If you need to change the information later, you must fill out a new form. 2012 irs income tax forms If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. 2012 irs income tax forms You may be able to avoid overwithholding if your employer agrees to use the part-year method. 2012 irs income tax forms See Part-Year Method in chapter 1 of Publication 505 for more information. 2012 irs income tax forms Employee also receiving pension income. 2012 irs income tax forms   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. 2012 irs income tax forms However, you can choose to split your withholding allowances between your pension and job in any manner. 2012 irs income tax forms Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. 2012 irs income tax forms When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. 2012 irs income tax forms If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. 2012 irs income tax forms Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. 2012 irs income tax forms Changing your withholding for 2015. 2012 irs income tax forms   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. 2012 irs income tax forms If the event occurs in December 2014, submit a new Form W-4 within 10 days. 2012 irs income tax forms Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. 2012 irs income tax forms If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. 2012 irs income tax forms You should try to have your withholding match your actual tax liability. 2012 irs income tax forms If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. 2012 irs income tax forms If too much tax is withheld, you will lose the use of that money until you get your refund. 2012 irs income tax forms Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. 2012 irs income tax forms Note. 2012 irs income tax forms You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. 2012 irs income tax forms Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. 2012 irs income tax forms The worksheets are for your own records. 2012 irs income tax forms Do not give them to your employer. 2012 irs income tax forms Multiple jobs. 2012 irs income tax forms   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. 2012 irs income tax forms Then split your allowances between the Forms W-4 for each job. 2012 irs income tax forms You cannot claim the same allowances with more than one employer at the same time. 2012 irs income tax forms You can claim all your allowances with one employer and none with the other(s), or divide them any other way. 2012 irs income tax forms Married individuals. 2012 irs income tax forms   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. 2012 irs income tax forms Use only one set of worksheets. 2012 irs income tax forms You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. 2012 irs income tax forms   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. 2012 irs income tax forms Alternative method of figuring withholding allowances. 2012 irs income tax forms   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. 2012 irs income tax forms For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. 2012 irs income tax forms Personal Allowances Worksheet. 2012 irs income tax forms   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. 2012 irs income tax forms Deduction and Adjustments Worksheet. 2012 irs income tax forms   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. 2012 irs income tax forms Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. 2012 irs income tax forms Two-Earners/Multiple Jobs Worksheet. 2012 irs income tax forms   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. 2012 irs income tax forms Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. 2012 irs income tax forms Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. 2012 irs income tax forms You accurately complete all the Form W-4 worksheets that apply to you. 2012 irs income tax forms You give your employer a new Form W-4 when changes occur. 2012 irs income tax forms But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. 2012 irs income tax forms This is most likely to happen in the following situations. 2012 irs income tax forms You are married and both you and your spouse work. 2012 irs income tax forms You have more than one job at a time. 2012 irs income tax forms You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. 2012 irs income tax forms You will owe additional amounts with your return, such as self-employment tax. 2012 irs income tax forms Your withholding is based on obsolete Form W-4 information for a substantial part of the year. 2012 irs income tax forms Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. 2012 irs income tax forms You work only part of the year. 2012 irs income tax forms You change the number of your withholding allowances during the year. 2012 irs income tax forms Cumulative wage method. 2012 irs income tax forms   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. 2012 irs income tax forms You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. 2012 irs income tax forms You must ask your employer in writing to use this method. 2012 irs income tax forms   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. 2012 irs income tax forms ) since the beginning of the year. 2012 irs income tax forms Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. 2012 irs income tax forms It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. 2012 irs income tax forms It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. 2012 irs income tax forms If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. 2012 irs income tax forms You can use the IRS Withholding Calculator at www. 2012 irs income tax forms irs. 2012 irs income tax forms gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. 2012 irs income tax forms Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. 2012 irs income tax forms These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. 2012 irs income tax forms New Form W-4. 2012 irs income tax forms   When you start a new job, your employer should have you complete a Form W-4. 2012 irs income tax forms Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. 2012 irs income tax forms   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. 2012 irs income tax forms The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. 2012 irs income tax forms No Form W-4. 2012 irs income tax forms   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. 2012 irs income tax forms Repaying withheld tax. 2012 irs income tax forms   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. 2012 irs income tax forms Your employer cannot repay any of the tax previously withheld. 2012 irs income tax forms Instead, claim the full amount withheld when you file your tax return. 2012 irs income tax forms   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. 2012 irs income tax forms Your employer can repay the amount that was withheld incorrectly. 2012 irs income tax forms If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. 2012 irs income tax forms Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. 2012 irs income tax forms The exemption applies only to income tax, not to social security or Medicare tax. 2012 irs income tax forms You can claim exemption from withholding for 2014 only if both of the following situations apply. 2012 irs income tax forms For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. 2012 irs income tax forms For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. 2012 irs income tax forms Students. 2012 irs income tax forms   If you are a student, you are not automatically exempt. 2012 irs income tax forms See chapter 1 to find out if you must file a return. 2012 irs income tax forms If you work only part time or only during the summer, you may qualify for exemption from withholding. 2012 irs income tax forms Age 65 or older or blind. 2012 irs income tax forms   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. 2012 irs income tax forms Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. 2012 irs income tax forms Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. 2012 irs income tax forms Claiming exemption from withholding. 2012 irs income tax forms   To claim exemption, you must give your employer a Form W-4. 2012 irs income tax forms Do not complete lines 5 and 6. 2012 irs income tax forms Enter “Exempt” on line 7. 2012 irs income tax forms   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. 2012 irs income tax forms If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. 2012 irs income tax forms   Your claim of exempt status may be reviewed by the IRS. 2012 irs income tax forms An exemption is good for only 1 year. 2012 irs income tax forms   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. 2012 irs income tax forms Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. 2012 irs income tax forms The payer can figure withholding on supplemental wages using the same method used for your regular wages. 2012 irs income tax forms However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. 2012 irs income tax forms Expense allowances. 2012 irs income tax forms   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. 2012 irs income tax forms   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. 2012 irs income tax forms   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. 2012 irs income tax forms Penalties You may have to pay a penalty of $500 if both of the following apply. 2012 irs income tax forms You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. 2012 irs income tax forms You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. 2012 irs income tax forms There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. 2012 irs income tax forms The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. 2012 irs income tax forms These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. 2012 irs income tax forms A simple error or an honest mistake will not result in one of these penalties. 2012 irs income tax forms For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. 2012 irs income tax forms Tips The tips you receive while working on your job are considered part of your pay. 2012 irs income tax forms You must include your tips on your tax return on the same line as your regular pay. 2012 irs income tax forms However, tax is not withheld directly from tip income, as it is from your regular pay. 2012 irs income tax forms Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. 2012 irs income tax forms See chapter 6 for information on reporting your tips to your employer. 2012 irs income tax forms For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. 2012 irs income tax forms How employer figures amount to withhold. 2012 irs income tax forms   The tips you report to your employer are counted as part of your income for the month you report them. 2012 irs income tax forms Your employer can figure your withholding in either of two ways. 2012 irs income tax forms By withholding at the regular rate on the sum of your pay plus your reported tips. 2012 irs income tax forms By withholding at the regular rate on your pay plus a percentage of your reported tips. 2012 irs income tax forms Not enough pay to cover taxes. 2012 irs income tax forms   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. 2012 irs income tax forms See Giving your employer money for taxes in chapter 6. 2012 irs income tax forms Allocated tips. 2012 irs income tax forms   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. 2012 irs income tax forms Withholding is based only on your pay plus your reported tips. 2012 irs income tax forms Your employer should refund to you any incorrectly withheld tax. 2012 irs income tax forms See Allocated Tips in chapter 6 for more information. 2012 irs income tax forms Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. 2012 irs income tax forms Your employer generally must withhold income tax on these benefits from your regular pay. 2012 irs income tax forms For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. 2012 irs income tax forms Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. 2012 irs income tax forms Your employer must notify you if this choice is made. 2012 irs income tax forms For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. 2012 irs income tax forms Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. 2012 irs income tax forms To qualify as sick pay, it must be paid under a plan to which your employer is a party. 2012 irs income tax forms If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. 2012 irs income tax forms An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. 2012 irs income tax forms However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. 2012 irs income tax forms See Form W-4S , later. 2012 irs income tax forms If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. 2012 irs income tax forms Union agreements. 2012 irs income tax forms   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. 2012 irs income tax forms See your union representative or your employer for more information. 2012 irs income tax forms Form W-4S. 2012 irs income tax forms   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. 2012 irs income tax forms Its instructions contain a worksheet you can use to figure the amount you want withheld. 2012 irs income tax forms They also explain restrictions that may apply. 2012 irs income tax forms   Give the completed form to the payer of your sick pay. 2012 irs income tax forms The payer must withhold according to your directions on the form. 2012 irs income tax forms Estimated tax. 2012 irs income tax forms   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. 2012 irs income tax forms If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. 2012 irs income tax forms See Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. 2012 irs income tax forms This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. 2012 irs income tax forms The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). 2012 irs income tax forms Income tax withholding from an ERD is mandatory. 2012 irs income tax forms More information. 2012 irs income tax forms   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. 2012 irs income tax forms For information on IRAs, see chapter 17. 2012 irs income tax forms For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. 2012 irs income tax forms Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. 2012 irs income tax forms Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. 2012 irs income tax forms Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. 2012 irs income tax forms Any other wager, if the proceeds are at least 300 times the amount of the bet. 2012 irs income tax forms It does not matter whether your winnings are paid in cash, in property, or as an annuity. 2012 irs income tax forms Winnings not paid in cash are taken into account at their fair market value. 2012 irs income tax forms Exception. 2012 irs income tax forms   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. 2012 irs income tax forms However, you may need to provide the payer with a social security number to avoid withholding. 2012 irs income tax forms See Backup withholding on gambling winnings in chapter 1 of Publication 505. 2012 irs income tax forms If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. 2012 irs income tax forms See Estimated Tax for 2014 , later. 2012 irs income tax forms If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 2012 irs income tax forms See Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms Form W-2G. 2012 irs income tax forms   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. 2012 irs income tax forms Report the tax withheld on line 62 of Form 1040. 2012 irs income tax forms Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. 2012 irs income tax forms To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. 2012 irs income tax forms All unemployment compensation is taxable. 2012 irs income tax forms So, if you do not have income tax withheld, you may have to pay estimated tax. 2012 irs income tax forms See Estimated Tax for 2014 , later. 2012 irs income tax forms If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 2012 irs income tax forms For information, see Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms Federal Payments You can choose to have income tax withheld from certain federal payments you receive. 2012 irs income tax forms These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. 2012 irs income tax forms S. 2012 irs income tax forms C. 2012 irs income tax forms 1421 et. 2012 irs income tax forms seq. 2012 irs income tax forms ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. 2012 irs income tax forms To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. 2012 irs income tax forms If you do not choose to have income tax withheld, you may have to pay estimated tax. 2012 irs income tax forms See Estimated Tax for 2014 , later. 2012 irs income tax forms If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 2012 irs income tax forms For information, see Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms More information. 2012 irs income tax forms   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. 2012 irs income tax forms Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. 2012 irs income tax forms Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. 2012 irs income tax forms The information return shows how much you were paid during the year. 2012 irs income tax forms It also includes your name and taxpayer identification number (TIN). 2012 irs income tax forms TINs are explained in chapter 1 under Social Security Number (SSN) . 2012 irs income tax forms These payments generally are not subject to withholding. 2012 irs income tax forms However, “backup” withholding is required in certain situations. 2012 irs income tax forms Backup withholding can apply to most kinds of payments that are reported on Form 1099. 2012 irs income tax forms The payer must withhold at a flat 28% rate in the following situations. 2012 irs income tax forms You do not give the payer your TIN in the required manner. 2012 irs income tax forms The IRS notifies the payer that the TIN you gave is incorrect. 2012 irs income tax forms You are required, but fail, to certify that you are not subject to backup withholding. 2012 irs income tax forms The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. 2012 irs income tax forms The IRS will do this only after it has mailed you four notices over at least a 210-day period. 2012 irs income tax forms See Backup Withholding in chapter 1 of Publication 505 for more information. 2012 irs income tax forms Penalties. 2012 irs income tax forms   There are civil and criminal penalties for giving false information to avoid backup withholding. 2012 irs income tax forms The civil penalty is $500. 2012 irs income tax forms The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. 2012 irs income tax forms Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. 2012 irs income tax forms This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. 2012 irs income tax forms You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. 2012 irs income tax forms Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. 2012 irs income tax forms If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 2012 irs income tax forms If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. 2012 irs income tax forms For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. 2012 irs income tax forms Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. 2012 irs income tax forms To do this, give a new Form W-4 to your employer. 2012 irs income tax forms See chapter 1 of Publication 505. 2012 irs income tax forms Estimated tax not required. 2012 irs income tax forms   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. 2012 irs income tax forms You had no tax liability for 2013. 2012 irs income tax forms You were a U. 2012 irs income tax forms S. 2012 irs income tax forms citizen or resident alien for the whole year. 2012 irs income tax forms Your 2013 tax year covered a 12-month period. 2012 irs income tax forms   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. 2012 irs income tax forms For the definition of “total tax” for 2013, see Publication 505, chapter 2. 2012 irs income tax forms Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. 2012 irs income tax forms You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. 2012 irs income tax forms General rule. 2012 irs income tax forms   In most cases, you must pay estimated tax for 2014 if both of the following apply. 2012 irs income tax forms You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. 2012 irs income tax forms You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). 2012 irs income tax forms Your 2013 tax return must cover all 12 months. 2012 irs income tax forms    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. 2012 irs income tax forms Special rules for farmers, fishermen, and higher income taxpayers. 2012 irs income tax forms   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. 2012 irs income tax forms If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. 2012 irs income tax forms See Figure 4-A and Publication 505, chapter 2 for more information. 2012 irs income tax forms Figure 4-A. 2012 irs income tax forms Do You Have To Pay Estimated Tax? Please click here for the text description of the image. 2012 irs income tax forms Figure 4-A Do You Have To Pay Estimated Tax? Aliens. 2012 irs income tax forms   Resident and nonresident aliens also may have to pay estimated tax. 2012 irs income tax forms Resident aliens should follow the rules in this chapter unless noted otherwise. 2012 irs income tax forms Nonresident aliens should get Form 1040-ES (NR), U. 2012 irs income tax forms S. 2012 irs income tax forms Estimated Tax for Nonresident Alien Individuals. 2012 irs income tax forms   You are an alien if you are not a citizen or national of the United States. 2012 irs income tax forms You are a resident alien if you either have a green card or meet the substantial presence test. 2012 irs income tax forms For more information about the substantial presence test, see Publication 519, U. 2012 irs income tax forms S. 2012 irs income tax forms Tax Guide for Aliens. 2012 irs income tax forms Married taxpayers. 2012 irs income tax forms   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. 2012 irs income tax forms   You and your spouse can make joint estimated tax payments even if you are not living together. 2012 irs income tax forms   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). 2012 irs income tax forms   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. 2012 irs income tax forms Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. 2012 irs income tax forms 2013 separate returns and 2014 joint return. 2012 irs income tax forms   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. 2012 irs income tax forms You filed a separate return if you filed as single, head of household, or married filing separately. 2012 irs income tax forms 2013 joint return and 2014 separate returns. 2012 irs income tax forms   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. 2012 irs income tax forms You file a separate return if you file as single, head of household, or married filing separately. 2012 irs income tax forms   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. 2012 irs income tax forms Then multiply the tax on the joint return by the following fraction. 2012 irs income tax forms     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. 2012 irs income tax forms Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. 2012 irs income tax forms Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. 2012 irs income tax forms For 2014, they plan to file married filing separately. 2012 irs income tax forms Joe figures his share of the tax on the 2013 joint return as follows. 2012 irs income tax forms   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. 2012 irs income tax forms 6%     Joe's share of tax on joint return  ($6,386 × 87. 2012 irs income tax forms 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. 2012 irs income tax forms When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. 2012 irs income tax forms Use your 2013 federal tax return as a guide. 2012 irs income tax forms You can use Form 1040-ES and Publication 505 to figure your estimated tax. 2012 irs income tax forms Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). 2012 irs income tax forms You must make adjustments both for changes in your own situation and for recent changes in the tax law. 2012 irs income tax forms For a discussion of these changes, visit IRS. 2012 irs income tax forms gov. 2012 irs income tax forms For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. 2012 irs income tax forms When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. 2012 irs income tax forms Each period has a specific payment due date. 2012 irs income tax forms If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. 2012 irs income tax forms The payment periods and due dates for estimated tax payments are shown next. 2012 irs income tax forms   For the period: Due date:*     Jan. 2012 irs income tax forms 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. 2012 irs income tax forms 15     Sept. 2012 irs income tax forms 1– Dec. 2012 irs income tax forms 31 Jan. 2012 irs income tax forms 15, next year     *See Saturday, Sunday, holiday rule and January payment . 2012 irs income tax forms Saturday, Sunday, holiday rule. 2012 irs income tax forms   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. 2012 irs income tax forms January payment. 2012 irs income tax forms   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. 2012 irs income tax forms Fiscal year taxpayers. 2012 irs income tax forms   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. 2012 irs income tax forms When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. 2012 irs income tax forms If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. 2012 irs income tax forms You can pay all your estimated tax at that time, or you can pay it in installments. 2012 irs income tax forms If you choose to pay in installments, make your first payment by the due date for the first payment period. 2012 irs income tax forms Make your remaining installment payments by the due dates for the later periods. 2012 irs income tax forms No income subject to estimated tax during first period. 2012 irs income tax forms    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. 2012 irs income tax forms You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. 2012 irs income tax forms The following chart shows when to make installment payments. 2012 irs income tax forms If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. 2012 irs income tax forms 15 Jan. 2012 irs income tax forms 15 next year April 1–May 31 June 16 Sept. 2012 irs income tax forms 15 Jan. 2012 irs income tax forms 15 next year June 1–Aug. 2012 irs income tax forms 31 Sept. 2012 irs income tax forms 15 Jan. 2012 irs income tax forms 15 next year After Aug. 2012 irs income tax forms 31 Jan. 2012 irs income tax forms 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . 2012 irs income tax forms How much to pay to avoid a penalty. 2012 irs income tax forms   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. 2012 irs income tax forms How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. 2012 irs income tax forms You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. 2012 irs income tax forms These methods are described in chapter 2 of Publication 505. 2012 irs income tax forms If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. 2012 irs income tax forms If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. 2012 irs income tax forms Underpayment penalty. 2012 irs income tax forms   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. 2012 irs income tax forms Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. 2012 irs income tax forms See chapter 4 of Publication 505 for more information. 2012 irs income tax forms Change in estimated tax. 2012 irs income tax forms   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. 2012 irs income tax forms Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. 2012 irs income tax forms Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. 2012 irs income tax forms You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. 2012 irs income tax forms How To Pay Estimated Tax There are several ways to pay estimated tax. 2012 irs income tax forms Credit an overpayment on your 2013 return to your 2014 estimated tax. 2012 irs income tax forms Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. 2012 irs income tax forms Send in your payment (check or money order) with a payment voucher from Form 1040-ES. 2012 irs income tax forms Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. 2012 irs income tax forms On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. 2012 irs income tax forms Take the amount you have credited into account when figuring your estimated tax payments. 2012 irs income tax forms You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. 2012 irs income tax forms You also cannot use that overpayment in any other way. 2012 irs income tax forms Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. 2012 irs income tax forms You can pay using either of the following electronic payment methods. 2012 irs income tax forms Direct transfer from your bank account. 2012 irs income tax forms Credit or debit card. 2012 irs income tax forms To pay your taxes online or for more information, go to www. 2012 irs income tax forms irs. 2012 irs income tax forms gov/e-pay. 2012 irs income tax forms Pay by Phone Paying by phone is another safe and secure method of paying electronically. 2012 irs income tax forms Use one of the following methods. 2012 irs income tax forms Direct transfer from your bank account. 2012 irs income tax forms Credit or debit card. 2012 irs income tax forms To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). 2012 irs income tax forms People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. 2012 irs income tax forms To pay using a credit or debit card, you can call one of the following service providers. 2012 irs income tax forms There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. 2012 irs income tax forms WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. 2012 irs income tax forms payUSAtax. 2012 irs income tax forms com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. 2012 irs income tax forms officialpayments. 2012 irs income tax forms com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. 2012 irs income tax forms PAY1040. 2012 irs income tax forms com For the latest details on how to pay by phone, go to www. 2012 irs income tax forms irs. 2012 irs income tax forms gov/e-pay. 2012 irs income tax forms Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. 2012 irs income tax forms During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. 2012 irs income tax forms The enclosed payment vouchers will be preprinted with your name, address, and social security number. 2012 irs income tax forms Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. 2012 irs income tax forms Use the window envelopes that came with your Form 1040-ES package. 2012 irs income tax forms If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. 2012 irs income tax forms Note. 2012 irs income tax forms These criteria can change without notice. 2012 irs income tax forms If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. 2012 irs income tax forms irs. 2012 irs income tax forms gov and print a copy of Form 1040-ES which includes four blank payment vouchers. 2012 irs income tax forms Complete one of these and make your payment timely to avoid penalties for paying late. 2012 irs income tax forms Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. 2012 irs income tax forms If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. 2012 irs income tax forms gov. 2012 irs income tax forms Follow the instructions to make sure you use the vouchers correctly. 2012 irs income tax forms Joint estimated tax payments. 2012 irs income tax forms   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. 2012 irs income tax forms Change of address. 2012 irs income tax forms   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. 2012 irs income tax forms Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. 2012 irs income tax forms Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. 2012 irs income tax forms Also take credit for the estimated tax you paid for 2013. 2012 irs income tax forms These credits are subtracted from your total tax. 2012 irs income tax forms Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. 2012 irs income tax forms Two or more employers. 2012 irs income tax forms   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. 2012 irs income tax forms You may be able to claim the excess as a credit against your income tax when you file your return. 2012 irs income tax forms See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. 2012 irs income tax forms Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. 2012 irs income tax forms Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. 2012 irs income tax forms Forms W-2 and W-2G. 2012 irs income tax forms   If you file a paper return, always file Form W-2 with your income tax return. 2012 irs income tax forms File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. 2012 irs income tax forms   You should get at least two copies of each form. 2012 irs income tax forms If you file a paper return, attach one copy to the front of your federal income tax return. 2012 irs income tax forms Keep one copy for your records. 2012 irs income tax forms You also should receive copies to file with your state and local returns. 2012 irs income tax forms Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. 2012 irs income tax forms You should receive a separate Form W-2 from each employer you worked for. 2012 irs income tax forms If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. 2012 irs income tax forms However, your employer must provide or send it to you by January 31, 2014. 2012 irs income tax forms If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. 2012 irs income tax forms If you have not received your Form W-2 by January 31, you should ask your employer for it. 2012 irs income tax forms If you do not receive it by February 15, call the IRS. 2012 irs income tax forms Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. 2012 irs income tax forms Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. 2012 irs income tax forms In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. 2012 irs income tax forms Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. 2012 irs income tax forms If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. 2012 irs income tax forms Report the amounts you won on line 21 of Form 1040. 2012 irs income tax forms Take credit for the tax withheld on line 62 of Form 1040. 2012 irs income tax forms If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. 2012 irs income tax forms The 1099 Series Most forms in the 1099 series are not filed with your return. 2012 irs income tax forms These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). 2012 irs income tax forms Unless instructed to file any of these forms with your return, keep them for your records. 2012 irs income tax forms There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 2012 irs income tax forms ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. 2012 irs income tax forms If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. 2012 irs income tax forms See the instructions to these forms for details. 2012 irs income tax forms Form 1099-R. 2012 irs income tax forms   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. 2012 irs income tax forms Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. 2012 irs income tax forms You cannot use Form 1040EZ if you received payments reported on Form 1099-R. 2012 irs income tax forms Backup withholding. 2012 irs income tax forms   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. 2012 irs income tax forms Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. 2012 irs income tax forms Call the telephone number or write to the address given for the payer on the form. 2012 irs income tax forms The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. 2012 irs income tax forms A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. 2012 irs income tax forms In certain situations, you will receive two forms in place of the original incorrect form. 2012 irs income tax forms This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). 2012 irs income tax forms One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. 2012 irs income tax forms This form will have an “X” in the “CORRECTED” box at the top of the form. 2012 irs income tax forms The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). 2012 irs income tax forms Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. 2012 irs income tax forms S. 2012 irs income tax forms Individual Income Tax Return. 2012 irs income tax forms Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. 2012 irs income tax forms Do not include any amount withheld from your spouse's income. 2012 irs income tax forms However, different rules may apply if you live in a community property state. 2012 irs income tax forms Community property states are listed in chapter 2. 2012 irs income tax forms For more information on these rules, and some exceptions, see Publication 555, Community Property. 2012 irs income tax forms Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. 2012 irs income tax forms For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. 2012 irs income tax forms Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. 2012 irs income tax forms Include any overpayment from 2012 that you had credited to your 2013 estimated tax. 2012 irs income tax forms You must use Form 1040 or Form 1040A if you paid estimated tax. 2012 irs income tax forms You cannot use Form 1040EZ. 2012 irs income tax forms Name changed. 2012 irs income tax forms   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. 2012 irs income tax forms The statement should cover payments you made jointly with your spouse as well as any you made separately. 2012 irs income tax forms   Be sure to report the change to the Social Security Administration. 2012 irs income tax forms This prevents delays in processing your return and issuing any refunds. 2012 irs income tax forms Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. 2012 irs income tax forms If you made joint estimated tax payments, you must decide how to divide the payments between your returns. 2012 irs income tax forms One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. 2012 irs income tax forms If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. 2012 irs income tax forms Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. 2012 irs income tax forms If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. 2012 irs income tax forms If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. 2012 irs income tax forms If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. 2012 irs income tax forms Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. 2012 irs income tax forms Generally, you will not have to pay a penalty for 2013 if any of the following apply. 2012 irs income tax forms The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. 2012 irs income tax forms The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. 2012 irs income tax forms Your total 2013 tax minus your withholding and refundable credits is less than $1,000. 2012 irs income tax forms You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. 2012 irs income tax forms See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. 2012 irs income tax forms Farmers and fishermen. 2012 irs income tax forms   Special rules apply if you are a farmer or fisherman. 2012 irs income tax forms See Farmers and Fishermen in chapter 4 of Publication 505 for more information. 2012 irs income tax forms IRS can figure the penalty for you. 2012 irs income tax forms   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. 2012 irs income tax forms Generally, the IRS will figure the penalty for you and send you a bill. 2012 irs income tax forms However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. 2012 irs income tax forms See chapter 4 of Publication 505. 2012 irs income tax forms Prev  Up  Next   Home   More Online Publications