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2012 Tax Forms Ez

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2012 Tax Forms Ez

2012 tax forms ez Publication 525 - Main Content Table of Contents Employee CompensationBabysitting. 2012 tax forms ez Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Business and Investment IncomeRents From Personal Property Royalties Partnership Income S Corporation Income Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Miscellaneous IncomeBartering Canceled Debts Host or Hostess Life Insurance Proceeds Recoveries Survivor Benefits Unemployment Benefits Welfare and Other Public Assistance Benefits Other Income RepaymentsMethod 1. 2012 tax forms ez Method 2. 2012 tax forms ez How To Get Tax HelpLow Income Taxpayer Clinics Employee Compensation In most cases, you must include in gross income everything you receive in payment for personal services. 2012 tax forms ez In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. 2012 tax forms ez You should receive a Form W-2 from your employer or former employer showing the pay you received for your services. 2012 tax forms ez Include all your pay on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ, even if you do not receive Form W-2, or you receive a Form W-2 that does not include all pay that should be included on the Form W-2. 2012 tax forms ez If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. 2012 tax forms ez These wages must be included on line 7 of Form 1040. 2012 tax forms ez See Form 8919 for more information. 2012 tax forms ez Childcare providers. 2012 tax forms ez   If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. 2012 tax forms ez If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. 2012 tax forms ez You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. 2012 tax forms ez Babysitting. 2012 tax forms ez   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. 2012 tax forms ez Bankruptcy. 2012 tax forms ez   If you filed for bankruptcy under Chapter 11 of the Bankruptcy Code, you must allocate your wages and withheld income tax. 2012 tax forms ez Your W-2 will show your total wages and withheld income tax for the year. 2012 tax forms ez On your tax return, you report the wages and withheld income tax for the period before you filed for bankruptcy. 2012 tax forms ez Your bankruptcy estate reports the wages and withheld income tax for the period after you filed for bankruptcy. 2012 tax forms ez If you receive other information returns (such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income) that report gross income to you, rather than to the bankruptcy estate, you must allocate that income. 2012 tax forms ez   The only exception is for purposes of figuring your self-employment tax, if you are self-employed. 2012 tax forms ez For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. 2012 tax forms ez   You must file a statement with your income tax return stating you filed a Chapter 11 bankruptcy case. 2012 tax forms ez The statement must show the allocation and describe the method used to make the allocation. 2012 tax forms ez For a sample of this statement and other information, see Notice 2006-83, 2006-40 I. 2012 tax forms ez R. 2012 tax forms ez B. 2012 tax forms ez 596, available at www. 2012 tax forms ez irs. 2012 tax forms ez gov/irb/2006-40_IRB/ar12. 2012 tax forms ez html. 2012 tax forms ez Miscellaneous Compensation This section discusses many types of employee compensation. 2012 tax forms ez The subjects are arranged in alphabetical order. 2012 tax forms ez Advance commissions and other earnings. 2012 tax forms ez   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. 2012 tax forms ez    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. 2012 tax forms ez If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), Itemized Deductions, or you may be able to take a credit for that year. 2012 tax forms ez See Repayments , later. 2012 tax forms ez Allowances and reimbursements. 2012 tax forms ez    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2012 tax forms ez If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. 2012 tax forms ez Back pay awards. 2012 tax forms ez   Include in income amounts you are awarded in a settlement or judgment for back pay. 2012 tax forms ez These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. 2012 tax forms ez They should be reported to you by your employer on Form W-2. 2012 tax forms ez Bonuses and awards. 2012 tax forms ez    Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. 2012 tax forms ez These include prizes such as vacation trips for meeting sales goals. 2012 tax forms ez If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. 2012 tax forms ez However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. 2012 tax forms ez Employee achievement award. 2012 tax forms ez   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. 2012 tax forms ez However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. 2012 tax forms ez Your employer can tell you whether your award is a qualified plan award. 2012 tax forms ez Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. 2012 tax forms ez   However, the exclusion does not apply to the following awards. 2012 tax forms ez A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. 2012 tax forms ez A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. 2012 tax forms ez Example. 2012 tax forms ez Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. 2012 tax forms ez Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. 2012 tax forms ez However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 − $1,600) in his income. 2012 tax forms ez Differential wage payments. 2012 tax forms ez   This is any payment made by an employer to an individual for any period during which the individual is, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages the individual would have received from the employer for that period. 2012 tax forms ez These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. 2012 tax forms ez The payments are reported as wages on Form W-2. 2012 tax forms ez Government cost-of-living allowances. 2012 tax forms ez   Most payments received by U. 2012 tax forms ez S. 2012 tax forms ez Government civilian employees for working abroad are taxable. 2012 tax forms ez However, certain cost-of-living allowances are tax free. 2012 tax forms ez Publication 516, U. 2012 tax forms ez S. 2012 tax forms ez Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. 2012 tax forms ez Nonqualified deferred compensation plans. 2012 tax forms ez   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. 2012 tax forms ez This amount is shown on Form W-2, box 12, using code Y. 2012 tax forms ez This amount is not included in your income. 2012 tax forms ez   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. 2012 tax forms ez This amount is included in your wages shown on Form W-2, box 1. 2012 tax forms ez It is also shown on Form W-2, box 12, using code Z. 2012 tax forms ez Nonqualified deferred compensation plans of nonqualified entities. 2012 tax forms ez   In most cases, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. 2012 tax forms ez For this purpose, a nonqualified entity is: A foreign corporation unless substantially all of its income is: Effectively connected with the conduct of a trade or business in the United States, or Subject to a comprehensive foreign income tax. 2012 tax forms ez A partnership unless substantially all of its income is allocated to persons other than: Foreign persons for whom the income is not subject to a comprehensive foreign income tax, and Tax-exempt organizations. 2012 tax forms ez Note received for services. 2012 tax forms ez   If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. 2012 tax forms ez When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. 2012 tax forms ez Do not include that part again in your income. 2012 tax forms ez Include the rest of the payment in your income in the year of payment. 2012 tax forms ez   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. 2012 tax forms ez Severance pay. 2012 tax forms ez   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. 2012 tax forms ez Accrued leave payment. 2012 tax forms ez   If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. 2012 tax forms ez   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. 2012 tax forms ez You can reduce gross wages by the amount you repaid in the same tax year in which you received it. 2012 tax forms ez Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on your return and the wages on your Forms W-2. 2012 tax forms ez Outplacement services. 2012 tax forms ez   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. 2012 tax forms ez    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). 2012 tax forms ez Sick pay. 2012 tax forms ez   Pay you receive from your employer while you are sick or injured is part of your salary or wages. 2012 tax forms ez In addition, you must include in your income sick pay benefits received from any of the following payers. 2012 tax forms ez A welfare fund. 2012 tax forms ez A state sickness or disability fund. 2012 tax forms ez An association of employers or employees. 2012 tax forms ez An insurance company, if your employer paid for the plan. 2012 tax forms ez However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. 2012 tax forms ez For more information, see Other Sickness and Injury Benefits under Sickness and Injury Benefits, later. 2012 tax forms ez Social security and Medicare taxes paid by employer. 2012 tax forms ez   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. 2012 tax forms ez The payment is also treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. 2012 tax forms ez However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. 2012 tax forms ez Stock appreciation rights. 2012 tax forms ez   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. 2012 tax forms ez When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. 2012 tax forms ez You include the cash payment in income in the year you use the right. 2012 tax forms ez Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. 2012 tax forms ez Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. 2012 tax forms ez See Valuation of Fringe Benefits , later in this discussion, for information on how to determine the amount to include in income. 2012 tax forms ez Recipient of fringe benefit. 2012 tax forms ez   You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided. 2012 tax forms ez You are considered to be the recipient even if it is given to another person, such as a member of your family. 2012 tax forms ez An example is a car your employer gives to your spouse for services you perform. 2012 tax forms ez The car is considered to have been provided to you and not to your spouse. 2012 tax forms ez   You do not have to be an employee of the provider to be a recipient of a fringe benefit. 2012 tax forms ez If you are a partner, director, or independent contractor, you also can be the recipient of a fringe benefit. 2012 tax forms ez Provider of benefit. 2012 tax forms ez   Your employer or another person for whom you perform services is the provider of a fringe benefit regardless of whether that person actually provides the fringe benefit to you. 2012 tax forms ez The provider can be a client or customer of an independent contractor. 2012 tax forms ez Accounting period. 2012 tax forms ez   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. 2012 tax forms ez Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. 2012 tax forms ez The general rule: benefits are reported for a full calendar year (January 1–December 31). 2012 tax forms ez The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. 2012 tax forms ez For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. 2012 tax forms ez Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. 2012 tax forms ez   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). 2012 tax forms ez Form W-2. 2012 tax forms ez   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. 2012 tax forms ez Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). 2012 tax forms ez However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). 2012 tax forms ez Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. 2012 tax forms ez Benefits you receive from the plan may be taxable, as explained, later, under Sickness and Injury Benefits . 2012 tax forms ez For information on the items covered in this section, other than Long-term care coverage , see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. 2012 tax forms ez Long-term care coverage. 2012 tax forms ez   Contributions by your employer to provide coverage for long-term care services generally are not included in your income. 2012 tax forms ez However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. 2012 tax forms ez This amount will be reported as wages in box 1 of your Form W-2. 2012 tax forms ez Archer MSA contributions. 2012 tax forms ez    Contributions by your employer to your Archer MSA generally are not included in your income. 2012 tax forms ez Their total will be reported in box 12 of Form W-2, with code R. 2012 tax forms ez You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. 2012 tax forms ez File the form with your return. 2012 tax forms ez Health flexible spending arrangement (health FSA). 2012 tax forms ez   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. 2012 tax forms ez   Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. 2012 tax forms ez The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. 2012 tax forms ez For more information, see Notice 2012-40, 2012-26 I. 2012 tax forms ez R. 2012 tax forms ez B. 2012 tax forms ez 1046, available at www. 2012 tax forms ez irs. 2012 tax forms ez gov/irb/2012-26 IRB/ar09. 2012 tax forms ez html. 2012 tax forms ez Health reimbursement arrangement (HRA). 2012 tax forms ez   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. 2012 tax forms ez Health savings accounts (HSA). 2012 tax forms ez   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. 2012 tax forms ez Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. 2012 tax forms ez Contributions made by your employer are not included in your income. 2012 tax forms ez Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. 2012 tax forms ez Distributions not used for qualified medical expenses are included in your income. 2012 tax forms ez See Publication 969 for the requirements of an HSA. 2012 tax forms ez   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. 2012 tax forms ez The contributions are treated as a distribution of money and are not included in the partner's gross income. 2012 tax forms ez Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. 2012 tax forms ez In both situations, the partner can deduct the contribution made to the partner's HSA. 2012 tax forms ez   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. 2012 tax forms ez The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. 2012 tax forms ez Qualified HSA funding distribution. 2012 tax forms ez   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. 2012 tax forms ez See Publication 590, Individual Retirement Arrangements (IRAs), for the requirements for these qualified HSA funding distributions. 2012 tax forms ez Failure to maintain eligibility. 2012 tax forms ez   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. 2012 tax forms ez If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. 2012 tax forms ez This income is also subject to an additional 10% tax. 2012 tax forms ez Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. 2012 tax forms ez See Instructions for Form 8839, Qualified Adoption Expenses, for more information. 2012 tax forms ez Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. 2012 tax forms ez They also are included as social security and Medicare wages in boxes 3 and 5. 2012 tax forms ez However, they are not included as wages in box 1. 2012 tax forms ez To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. 2012 tax forms ez File the form with your return. 2012 tax forms ez Athletic Facilities If your employer provides you with the free or low-cost use of an employer-operated gym or other athletic club on your employer's premises, the value is not included in your compensation. 2012 tax forms ez The gym must be used primarily by employees, their spouses, and their dependent children. 2012 tax forms ez If your employer pays for a fitness program provided to you at an off-site resort hotel or athletic club, the value of the program is included in your compensation. 2012 tax forms ez De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. 2012 tax forms ez In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. 2012 tax forms ez Also see Employee Discounts , later. 2012 tax forms ez Holiday gifts. 2012 tax forms ez   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. 2012 tax forms ez However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. 2012 tax forms ez Dependent Care Benefits If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. 2012 tax forms ez Dependent care benefits include: Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work, and The fair market value of care in a daycare facility provided or sponsored by your employer. 2012 tax forms ez The amount you can exclude is limited to the lesser of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). 2012 tax forms ez Your employer must show the total amount of dependent care benefits provided to you during the year under a qualified plan in box 10 of your Form W-2. 2012 tax forms ez Your employer also will include any dependent care benefits over $5,000 in your wages shown in box 1 of your Form W-2. 2012 tax forms ez To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. 2012 tax forms ez See the Instructions for Form 2441 for more information. 2012 tax forms ez Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. 2012 tax forms ez For more information, see Publication 970. 2012 tax forms ez Employee Discounts If your employer sells you property or services at a discount, you may be able to exclude the amount of the discount from your income. 2012 tax forms ez The exclusion applies to discounts on property or services offered to customers in the ordinary course of the line of business in which you work. 2012 tax forms ez However, it does not apply to discounts on real property or property commonly held for investment (such as stocks or bonds). 2012 tax forms ez The exclusion is limited to the price charged nonemployee customers multiplied by the following percentage. 2012 tax forms ez For a discount on property, your employer's gross profit percentage (gross profit divided by gross sales) on all property sold during the employer's previous tax year. 2012 tax forms ez (Ask your employer for this percentage. 2012 tax forms ez ) For a discount on services, 20%. 2012 tax forms ez Financial Counseling Fees Financial counseling fees paid for you by your employer are included in your income and must be reported as part of wages. 2012 tax forms ez If the fees are for tax or investment counseling, they can be deducted on Schedule A (Form 1040) as a miscellaneous deduction (subject to the 2%-of-AGI limit). 2012 tax forms ez Qualified retirement planning services paid for you by your employer may be excluded from your income. 2012 tax forms ez For more information, see Retirement Planning Services , later. 2012 tax forms ez Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. 2012 tax forms ez However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. 2012 tax forms ez For exceptions to this rule, see Entire cost excluded , and Entire cost taxed , later. 2012 tax forms ez If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. 2012 tax forms ez Also, it is shown separately in box 12 with code C. 2012 tax forms ez Group-term life insurance. 2012 tax forms ez   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. 2012 tax forms ez Permanent benefits. 2012 tax forms ez   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. 2012 tax forms ez Your employer should be able to tell you the amount to include in your income. 2012 tax forms ez Accidental death benefits. 2012 tax forms ez   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. 2012 tax forms ez Former employer. 2012 tax forms ez   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. 2012 tax forms ez Also, it is shown separately in box 12 with code C. 2012 tax forms ez Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. 2012 tax forms ez You must pay these taxes with your income tax return. 2012 tax forms ez Include them on line 60, Form 1040, and follow the instructions forline 60. 2012 tax forms ez For more information, see the Instructions for Form 1040. 2012 tax forms ez Two or more employers. 2012 tax forms ez   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. 2012 tax forms ez If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. 2012 tax forms ez You must figure how much to include in your income. 2012 tax forms ez Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. 2012 tax forms ez Figuring the taxable cost. 2012 tax forms ez    Use the following worksheet to figure the amount to include in your income. 2012 tax forms ez   If you pay any part of the cost of the insurance, your entire payment reduces, dollar for dollar, the amount you otherwise would include in your income. 2012 tax forms ez However, you cannot reduce the amount to include in your income by: Payments for coverage in a different tax year, Payments for coverage through a cafeteria plan, unless the payments are after-tax contributions, or Payments for coverage not taxed to you because of the exceptions discussed later under Entire cost excluded . 2012 tax forms ez Worksheet 1. 2012 tax forms ez Figuring the Cost of Group-Term Life Insurance To Include in Income 1. 2012 tax forms ez Enter the total amount of your insurance coverage from your employer(s) 1. 2012 tax forms ez   2. 2012 tax forms ez Limit on exclusion for employer-provided group-term life insurance coverage 2. 2012 tax forms ez 50,000 3. 2012 tax forms ez Subtract line 2 from line 1 3. 2012 tax forms ez   4. 2012 tax forms ez Divide line 3 by $1,000. 2012 tax forms ez Figure to the nearest tenth 4. 2012 tax forms ez   5. 2012 tax forms ez Go to Table 1. 2012 tax forms ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. 2012 tax forms ez   6. 2012 tax forms ez Multiply line 4 by line 5 6. 2012 tax forms ez     7. 2012 tax forms ez Enter the number of full months of coverage at this cost 7. 2012 tax forms ez   8. 2012 tax forms ez Multiply line 6 by line 7 8. 2012 tax forms ez   9. 2012 tax forms ez Enter the premiums you paid per month 9. 2012 tax forms ez       10. 2012 tax forms ez Enter the number of months you paid the  premiums 10. 2012 tax forms ez       11. 2012 tax forms ez Multiply line 9 by line 10. 2012 tax forms ez 11. 2012 tax forms ez   12. 2012 tax forms ez Subtract line 11 from line 8. 2012 tax forms ez Include this amount in your income as wages 12. 2012 tax forms ez   Table 1. 2012 tax forms ez Cost of $1,000 of Group-Term Life Insurance for One Month   Age Cost     Under 25 $ . 2012 tax forms ez 05     25 through 29 . 2012 tax forms ez 06     30 through 34 . 2012 tax forms ez 08     35 through 39 . 2012 tax forms ez 09     40 through 44 . 2012 tax forms ez 10     45 through 49 . 2012 tax forms ez 15     50 through 54 . 2012 tax forms ez 23     55 through 59 . 2012 tax forms ez 43     60 through 64 . 2012 tax forms ez 66     65 through 69 1. 2012 tax forms ez 27     70 and older 2. 2012 tax forms ez 06   Example. 2012 tax forms ez You are 51 years old and work for employers A and B. 2012 tax forms ez Both employers provide group-term life insurance coverage for you for the entire year. 2012 tax forms ez Your coverage is $35,000 with employer A and $45,000 with employer B. 2012 tax forms ez You pay premiums of $4. 2012 tax forms ez 15 a month under the employer B group plan. 2012 tax forms ez You figure the amount to include in your income as follows. 2012 tax forms ez   Worksheet 1. 2012 tax forms ez Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated 1. 2012 tax forms ez Enter the total amount of your insurance coverage from your employer(s) 1. 2012 tax forms ez 80,000 2. 2012 tax forms ez Limit on exclusion for employer-provided group-term life insurance coverage 2. 2012 tax forms ez 50,000 3. 2012 tax forms ez Subtract line 2 from line 1 3. 2012 tax forms ez 30,000 4. 2012 tax forms ez Divide line 3 by $1,000. 2012 tax forms ez Figure to the nearest tenth 4. 2012 tax forms ez 30. 2012 tax forms ez 0 5. 2012 tax forms ez Go to Table 1. 2012 tax forms ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. 2012 tax forms ez . 2012 tax forms ez 23 6. 2012 tax forms ez Multiply line 4 by line 5 6. 2012 tax forms ez 6. 2012 tax forms ez 90 7. 2012 tax forms ez Enter the number of full months of coverage at this cost. 2012 tax forms ez 7. 2012 tax forms ez 12 8. 2012 tax forms ez Multiply line 6 by line 7 8. 2012 tax forms ez 82. 2012 tax forms ez 80 9. 2012 tax forms ez Enter the premiums you paid per month 9. 2012 tax forms ez 4. 2012 tax forms ez 15     10. 2012 tax forms ez Enter the number of months you paid the premiums 10. 2012 tax forms ez 12     11. 2012 tax forms ez Multiply line 9 by line 10. 2012 tax forms ez 11. 2012 tax forms ez 49. 2012 tax forms ez 80 12. 2012 tax forms ez Subtract line 11 from line 8. 2012 tax forms ez Include this amount in your income as wages 12. 2012 tax forms ez 33. 2012 tax forms ez 00 The total amount to include in income for the cost of excess group-term life insurance is $33. 2012 tax forms ez Neither employer provided over $50,000 insurance coverage, so the wages shown on your Forms W-2 do not include any part of that $33. 2012 tax forms ez You must add it to the wages shown on your Forms W-2 and include the total on your return. 2012 tax forms ez Entire cost excluded. 2012 tax forms ez   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. 2012 tax forms ez You are permanently and totally disabled and have ended your employment. 2012 tax forms ez Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. 2012 tax forms ez A charitable organization to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. 2012 tax forms ez (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. 2012 tax forms ez ) The plan existed on January 1, 1984, and: You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. 2012 tax forms ez Entire cost taxed. 2012 tax forms ez   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply. 2012 tax forms ez The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. 2012 tax forms ez You are a key employee and your employer's plan discriminates in favor of key employees. 2012 tax forms ez Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. 2012 tax forms ez The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. 2012 tax forms ez The lodging is: Furnished on the business premises of your employer, Furnished for the convenience of your employer, and A condition of your employment. 2012 tax forms ez (You must accept it in order to be able to properly perform your duties. 2012 tax forms ez ) You also do not include in your income the value of meals or meal money that qualifies as a de minimis fringe benefit. 2012 tax forms ez See De Minimis (Minimal) Benefits , earlier. 2012 tax forms ez Faculty lodging. 2012 tax forms ez   If you are an employee of an educational institution or an academic health center and you are provided with lodging that does not meet the three conditions given earlier, you still may not have to include the value of the lodging in income. 2012 tax forms ez However, the lodging must be qualified campus lodging, and you must pay an adequate rent. 2012 tax forms ez Academic health center. 2012 tax forms ez   This is an organization that meets the following conditions. 2012 tax forms ez Its principal purpose or function is to provide medical or hospital care or medical education or research. 2012 tax forms ez It receives payments for graduate medical education under the Social Security Act. 2012 tax forms ez One of its principal purposes or functions is to provide and teach basic and clinical medical science and research using its own faculty. 2012 tax forms ez Qualified campus lodging. 2012 tax forms ez   Qualified campus lodging is lodging furnished to you, your spouse, or one of your dependents by, or on behalf of, the institution or center for use as a home. 2012 tax forms ez The lodging must be located on or near a campus of the educational institution or academic health center. 2012 tax forms ez Adequate rent. 2012 tax forms ez   The amount of rent you pay for the year for qualified campus lodging is considered adequate if it is at least equal to the lesser of: 5% of the appraised value of the lodging, or The average of rentals paid by individuals (other than employees or students) for comparable lodging held for rent by the educational institution. 2012 tax forms ez If the amount you pay is less than the lesser of these amounts, you must include the difference in your income. 2012 tax forms ez   The lodging must be appraised by an independent appraiser and the appraisal must be reviewed on an annual basis. 2012 tax forms ez Example. 2012 tax forms ez Carl Johnson, a sociology professor for State University, rents a home from the university that is qualified campus lodging. 2012 tax forms ez The house is appraised at $200,000. 2012 tax forms ez The average rent paid for comparable university lodging by persons other than employees or students is $14,000 a year. 2012 tax forms ez Carl pays an annual rent of $11,000. 2012 tax forms ez Carl does not include in his income any rental value because the rent he pays equals at least 5% of the appraised value of the house (5% × $200,000 = $10,000). 2012 tax forms ez If Carl paid annual rent of only $8,000, he would have to include $2,000 in his income ($10,000 − $8,000). 2012 tax forms ez Moving Expense Reimbursements In most cases, if your employer pays for your moving expenses (either directly or indirectly) and the expenses would have been deductible if you paid them yourself, the value is not included in your income. 2012 tax forms ez See Publication 521 for more information. 2012 tax forms ez No-Additional-Cost Services The value of services you receive from your employer for free, at cost, or for a reduced price is not included in your income if your employer: Offers the same service for sale to customers in the ordinary course of the line of business in which you work, and Does not have a substantial additional cost (including any sales income given up) to provide you with the service (regardless of what you paid for the service). 2012 tax forms ez In most cases, no-additional-cost services are excess capacity services, such as airline, bus, or train tickets, hotel rooms, and telephone services. 2012 tax forms ez Example. 2012 tax forms ez You are employed as a flight attendant for a company that owns both an airline and a hotel chain. 2012 tax forms ez Your employer allows you to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to you. 2012 tax forms ez The value of the personal flight is not included in your income. 2012 tax forms ez However, the value of the hotel room is included in your income because you do not work in the hotel business. 2012 tax forms ez Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. 2012 tax forms ez Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. 2012 tax forms ez You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. 2012 tax forms ez Also, see Financial Counseling Fees , earlier. 2012 tax forms ez Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. 2012 tax forms ez A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. 2012 tax forms ez Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. 2012 tax forms ez However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. 2012 tax forms ez Exclusion limit. 2012 tax forms ez   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. 2012 tax forms ez   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. 2012 tax forms ez   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. 2012 tax forms ez   If the benefits have a value that is more than these limits, the excess must be included in your income. 2012 tax forms ez You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. 2012 tax forms ez Commuter highway vehicle. 2012 tax forms ez   This is a highway vehicle that seats at least six adults (not including the driver). 2012 tax forms ez At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). 2012 tax forms ez Transit pass. 2012 tax forms ez   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. 2012 tax forms ez Qualified parking. 2012 tax forms ez   This is parking provided to an employee at or near the employer's place of business. 2012 tax forms ez It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. 2012 tax forms ez It does not include parking at or near the employee's home. 2012 tax forms ez Qualified bicycle commuting. 2012 tax forms ez   This is reimbursement based on the number of qualified bicycle commuting months for the year. 2012 tax forms ez A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. 2012 tax forms ez The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. 2012 tax forms ez Tuition Reduction You can exclude a qualified tuition reduction from your income. 2012 tax forms ez This is the amount of a reduction in tuition: For education (below graduate level) furnished by an educational institution to an employee, former employee who retired or became disabled, or his or her spouse and dependent children. 2012 tax forms ez For education furnished to a graduate student at an educational institution if the graduate student is engaged in teaching or research activities for that institution. 2012 tax forms ez Representing payment for teaching, research, or other services if you receive the amount under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance program. 2012 tax forms ez For more information, see Publication 970. 2012 tax forms ez Working Condition Benefits If your employer provides you with a product or service and the cost of it would have been allowable as a business or depreciation deduction if you paid for it yourself, the cost is not included in your income. 2012 tax forms ez Example. 2012 tax forms ez You work as an engineer and your employer provides you with a subscription to an engineering trade magazine. 2012 tax forms ez The cost of the subscription is not included in your income because the cost would have been allowable to you as a business deduction if you had paid for the subscription yourself. 2012 tax forms ez Valuation of Fringe Benefits If a fringe benefit is included in your income, the amount included is generally its value determined under the general valuation rule or under the special valuation rules. 2012 tax forms ez For an exception, see Group-Term Life Insurance , earlier. 2012 tax forms ez General valuation rule. 2012 tax forms ez   You must include in your income the amount by which the fair market value of the fringe benefit is more than the sum of: The amount, if any, you paid for the benefit, plus The amount, if any, specifically excluded from your income by law. 2012 tax forms ez If you pay fair market value for a fringe benefit, no amount is included in your income. 2012 tax forms ez Fair market value. 2012 tax forms ez   The fair market value of a fringe benefit is determined by all the facts and circumstances. 2012 tax forms ez It is the amount you would have to pay a third party to buy or lease the benefit. 2012 tax forms ez This is determined without regard to: Your perceived value of the benefit, or The amount your employer paid for the benefit. 2012 tax forms ez Employer-provided vehicles. 2012 tax forms ez   If your employer provides a car (or other highway motor vehicle) to you, your personal use of the car is usually a taxable noncash fringe benefit. 2012 tax forms ez   Under the general valuation rules, the value of an employer-provided vehicle is the amount you would have to pay a third party to lease the same or a similar vehicle on the same or comparable terms in the same geographic area where you use the vehicle. 2012 tax forms ez An example of a comparable lease term is the amount of time the vehicle is available for your use, such as a 1-year period. 2012 tax forms ez The value cannot be determined by multiplying a cents-per-mile rate times the number of miles driven unless you prove the vehicle could have been leased on a cents-per-mile basis. 2012 tax forms ez Flights on employer-provided aircraft. 2012 tax forms ez   Under the general valuation rules, if your flight on an employer-provided piloted aircraft is primarily personal and you control the use of the aircraft for the flight, the value is the amount it would cost to charter the flight from a third party. 2012 tax forms ez   If there is more than one employee on the flight, the cost to charter the aircraft must be divided among those employees. 2012 tax forms ez The division must be based on all the facts, including which employee or employees control the use of the aircraft. 2012 tax forms ez Special valuation rules. 2012 tax forms ez   You generally can use a special valuation rule for a fringe benefit only if your employer uses the rule. 2012 tax forms ez If your employer uses a special valuation rule, you cannot use a different special rule to value that benefit. 2012 tax forms ez You always can use the general valuation rule discussed earlier, based on facts and circumstances, even if your employer uses a special rule. 2012 tax forms ez   If you and your employer use a special valuation rule, you must include in your income the amount your employer determines under the special rule minus the sum of: Any amount you repaid your employer, plus Any amount specifically excluded from income by law. 2012 tax forms ez The special valuation rules are the following. 2012 tax forms ez The automobile lease rule. 2012 tax forms ez The vehicle cents-per-mile rule. 2012 tax forms ez The commuting rule. 2012 tax forms ez The unsafe conditions commuting rule. 2012 tax forms ez The employer-operated eating-facility rule. 2012 tax forms ez   For more information on these rules, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. 2012 tax forms ez    For information on the non-commercial flight and commercial flight valuation rules, see sections 1. 2012 tax forms ez 61-21(g) and 1. 2012 tax forms ez 61-21(h) of the regulations. 2012 tax forms ez Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. 2012 tax forms ez (Your employer can tell you whether your retirement plan is qualified. 2012 tax forms ez ) However, the cost of life insurance coverage included in the plan may have to be included. 2012 tax forms ez See Group-Term Life Insurance , earlier, under Fringe Benefits. 2012 tax forms ez If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. 2012 tax forms ez However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. 2012 tax forms ez For information on distributions from retirement plans, see Publication 575 (or Publication 721, Tax Guide to U. 2012 tax forms ez S. 2012 tax forms ez Civil Service Retirement Benefits, if you are a federal employee or retiree). 2012 tax forms ez Elective Deferrals If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. 2012 tax forms ez The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. 2012 tax forms ez An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. 2012 tax forms ez However, it is included in wages subject to social security and Medicare taxes. 2012 tax forms ez Elective deferrals include elective contributions to the following retirement plans. 2012 tax forms ez Cash or deferred arrangements (section 401(k) plans). 2012 tax forms ez The Thrift Savings Plan for federal employees. 2012 tax forms ez Salary reduction simplified employee pension plans (SARSEP). 2012 tax forms ez Savings incentive match plans for employees (SIMPLE plans). 2012 tax forms ez Tax-sheltered annuity plans (403(b) plans). 2012 tax forms ez Section 501(c)(18)(D) plans. 2012 tax forms ez (But see Reporting by employer , later. 2012 tax forms ez ) Section 457 plans. 2012 tax forms ez Qualified automatic contribution arrangements. 2012 tax forms ez   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. 2012 tax forms ez You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. 2012 tax forms ez The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. 2012 tax forms ez   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. 2012 tax forms ez Overall limit on deferrals. 2012 tax forms ez   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3), earlier. 2012 tax forms ez The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. 2012 tax forms ez Amounts deferred under specific plan limits are part of the overall limit on deferrals. 2012 tax forms ez   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. 2012 tax forms ez However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. 2012 tax forms ez Catch-up contributions. 2012 tax forms ez   You may be allowed catch-up contributions (additional elective deferrals) if you are age 50 or older by the end of your tax year. 2012 tax forms ez For more information about catch-up contributions to 403(b) plans, see chapter 6 of Publication 571, Tax Sheltered Annuity Plans. 2012 tax forms ez   For more information about additional elective deferrals to: SEPs (SARSEPs), see Salary Reduction Simplified Employee Pension in chapter 2 of Publication 560, Retirement Plans for Small Business. 2012 tax forms ez SIMPLE plans, see How Much Can Be Contributed on Your Behalf? in chapter 3 of Publication 590. 2012 tax forms ez Section 457 plans, see Limit for deferrals under section 457 plans , later. 2012 tax forms ez Limit for deferrals under SIMPLE plans. 2012 tax forms ez   If you are a participant in a SIMPLE plan, you generally should not have deferred more than $12,000 in 2013. 2012 tax forms ez Amounts you defer under a SIMPLE plan count toward the overall limit ($17,500 for 2013) and may affect the amount you can defer under other elective deferral plans. 2012 tax forms ez Limit for tax-sheltered annuities. 2012 tax forms ez   If you are a participant in a tax-sheltered annuity plan (403(b) plan), the limit on elective deferrals for 2013 generally is $17,500. 2012 tax forms ez However, if you have at least 15 years of service with a public school system, a hospital, a home health service agency, a health and welfare service agency, a church, or a convention or association of churches (or associated organization), the limit on elective deferrals is increased by the least of the following amounts. 2012 tax forms ez $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in earlier years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior tax years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. 2012 tax forms ez   If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013. 2012 tax forms ez   For more information, see Publication 571. 2012 tax forms ez Limit for deferral under section 501(c)(18) plans. 2012 tax forms ez   If you are a participant in a section 501(c)(18) plan (a trust created before June 25, 1959, funded only by employee contributions), you should have deferred no more than the lesser of $7,000 or 25% of your compensation. 2012 tax forms ez Amounts you defer under a section 501(c)(18) plan count toward the overall limit ($17,500 in 2013) and may affect the amount you can defer under other elective deferral plans. 2012 tax forms ez Limit for deferrals under section 457 plans. 2012 tax forms ez   If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organizations), you should have deferred no more than the lesser of your includible compensation or $17,500 in 2013. 2012 tax forms ez However, if you are within 3 years of normal retirement age, you may be allowed an increased limit if the plan allows it. 2012 tax forms ez See Increased limit , later. 2012 tax forms ez Includible compensation. 2012 tax forms ez   This is the pay you received for the year from the employer who maintained the section 457 plan. 2012 tax forms ez In most cases, it includes all the following payments. 2012 tax forms ez Wages and salaries. 2012 tax forms ez Fees for professional services. 2012 tax forms ez The value of any employer-provided qualified transportation fringe benefit (defined under Transportation , earlier) that is not included in your income. 2012 tax forms ez Other amounts received (cash or noncash) for personal services you performed, including, but not limited to, the following items. 2012 tax forms ez Commissions and tips. 2012 tax forms ez Fringe benefits. 2012 tax forms ez Bonuses. 2012 tax forms ez Employer contributions (elective deferrals) to: The section 457 plan. 2012 tax forms ez Qualified cash or deferred arrangements (section 401(k) plans) that are not included in your income. 2012 tax forms ez A salary reduction simplified employee pension (SARSEP). 2012 tax forms ez A tax-sheltered annuity (section 403(b) plan). 2012 tax forms ez A savings incentive match plan for employees (SIMPLE plan). 2012 tax forms ez A section 125 cafeteria plan. 2012 tax forms ez   Instead of using the amounts listed earlier to determine your includible compensation, your employer can use any of the following amounts. 2012 tax forms ez Your wages as defined for income tax withholding purposes. 2012 tax forms ez Your wages as reported in box 1 of Form W-2. 2012 tax forms ez Your wages that are subject to social security withholding (including elective deferrals). 2012 tax forms ez Increased limit. 2012 tax forms ez   During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your plan may provide that your limit is the lesser of: Twice the annual limit ($35,000 for 2013), or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions). 2012 tax forms ez Catch-up contributions. 2012 tax forms ez   You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. 2012 tax forms ez If you qualify, your limit can be the lesser of your includible compensation or $17,500, plus $5,500. 2012 tax forms ez However, if you are within 3 years of retirement age and your plan provides the increased limit, discussed earlier, that limit may be higher. 2012 tax forms ez Designated Roth contributions. 2012 tax forms ez   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. 2012 tax forms ez Designated Roth contributions are treated as elective deferrals, except that they are included in income. 2012 tax forms ez Your retirement plan must maintain separate accounts and recordkeeping for the designated Roth contributions. 2012 tax forms ez   Qualified distributions from a Roth plan are not included in income. 2012 tax forms ez In most cases, a distribution made before the end of the 5-tax-year period beginning with the first tax year for which you made a designated Roth contribution to the plan is not a qualified distribution. 2012 tax forms ez Reporting by employer. 2012 tax forms ez   Your employer generally should not include elective deferrals in your wages in box 1 of Form W-2. 2012 tax forms ez Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount deferred in box 12. 2012 tax forms ez Section 501(c)(18)(D) contributions. 2012 tax forms ez   Wages shown in box 1 of your Form W-2 should not have been reduced for contributions you made to a section 501(c)(18)(D) retirement plan. 2012 tax forms ez The amount you contributed should be identified with code “H” in box 12. 2012 tax forms ez You may deduct the amount deferred subject to the limits that apply. 2012 tax forms ez Include your deduction in the total on Form 1040, line 36. 2012 tax forms ez Enter the amount and “501(c)(18)(D)” on the dotted line next to line 36. 2012 tax forms ez Designated Roth contributions. 2012 tax forms ez    These contributions are elective deferrals but are included in your wages in box 1 of Form W-2. 2012 tax forms ez Designated Roth contributions to a section 401(k) plan are reported using code AA in box 12, or, for section 403(b) plans, code BB in box 12. 2012 tax forms ez Excess deferrals. 2012 tax forms ez   If your deferrals exceed the limit, you must notify your plan by the date required by the plan. 2012 tax forms ez If the plan permits, the excess amount will be distributed to you. 2012 tax forms ez If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. 2012 tax forms ez You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. 2012 tax forms ez The plan then must pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. 2012 tax forms ez   You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. 2012 tax forms ez File Form 1040 to add the excess deferral amount to your wages on line 7. 2012 tax forms ez Do not use Form 1040A or Form 1040EZ to report excess deferral amounts. 2012 tax forms ez Excess not distributed. 2012 tax forms ez   If you do not take out the excess amount, you cannot include it in the cost of the contract even though you included it in your income. 2012 tax forms ez Therefore, you are taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution. 2012 tax forms ez Excess distributed to you. 2012 tax forms ez   If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. 2012 tax forms ez If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. 2012 tax forms ez Any income on the excess deferral taken out is taxable in the tax year in which you take it out. 2012 tax forms ez If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income. 2012 tax forms ez    You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. 2012 tax forms ez Use the following rules to report a corrective distribution shown on Form 1099-R for 2013. 2012 tax forms ez If the distribution was for a 2013 excess deferral, your Form 1099-R should have the code “8” in box 7. 2012 tax forms ez Add the excess deferral amount to your wages on your 2013 tax return. 2012 tax forms ez If the distribution was for a 2013 excess deferral to a designated Roth account, your Form 1099-R should have code “B” in box 7. 2012 tax forms ez Do not add this amount to your wages on your 2013 return. 2012 tax forms ez If the distribution was for a 2012 excess deferral, your Form 1099-R should have the code “P” in box 7. 2012 tax forms ez If you did not add the excess deferral amount to your wages on your 2012 tax return, you must file an amended return on Form 1040X, Amended U. 2012 tax forms ez S. 2012 tax forms ez Individual Income Tax Return. 2012 tax forms ez If you did not receive the distribution by April 15, 2013, you also must add it to your wages on your 2013 tax return. 2012 tax forms ez If the distribution was for the income earned on an excess deferral, your Form 1099-R should have the code “8” in box 7. 2012 tax forms ez Add the income amount to your wages on your 2013 income tax return, regardless of when the excess deferral was made. 2012 tax forms ez Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. 2012 tax forms ez Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution. 2012 tax forms ez ”    Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. 2012 tax forms ez It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. 2012 tax forms ez Excess Contributions If you are a highly compensated employee, the total of your elective deferrals and other contributions made for you for any year under a section 401(k) plan or SARSEP can be, as a percentage of pay, no more than 125% of the average deferral percentage (ADP) of all eligible non-highly compensated employees. 2012 tax forms ez If the total contributed to the plan is more than the amount allowed under the ADP test, the excess contributions must be either distributed to you or recharacterized as after-tax employee contributions by treating them as distributed to you and then contributed by you to the plan. 2012 tax forms ez You must include the excess contributions in your income as wages on Form 1040, line 7. 2012 tax forms ez You cannot use Form 1040A or Form 1040EZ to report excess contribution amounts. 2012 tax forms ez If you receive a corrective distribution of excess contributions (and allocable income), it is included in your income in the year of the distribution. 2012 tax forms ez The allocable income is the amount of gain or loss through the end of the plan year for which the contribution was made that is allocable to the excess contributions. 2012 tax forms ez You should receive a Form 1099-R for the year the excess contributions are distributed to you. 2012 tax forms ez Add the distribution to your wages for that year. 2012 tax forms ez Even though a corrective distribution of excess contributions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. 2012 tax forms ez It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. 2012 tax forms ez Excess Annual Additions The amount contributed in 2013 to a defined contribution plan is generally limited to the lesser of 100% of your compensation or $51,000. 2012 tax forms ez Under certain circumstances, contributions that exceed these limits (excess annual additions) may be corrected by a distribution of your elective deferrals or a return of your after-tax contributions and earnings from these contributions. 2012 tax forms ez A corrective payment of excess annual additions consisting of elective deferrals or earnings from your after-tax contributions is fully taxable in the year paid. 2012 tax forms ez A corrective payment consisting of your after-tax contributions is not taxable. 2012 tax forms ez If you received a corrective payment of excess annual additions, you should receive a separate Form 1099-R for the year of the payment with the code “E” in box 7. 2012 tax forms ez Report the total payment shown in box 1 of Form 1099-R on line 16a of Form 1040 or line 12a of Form 1040A. 2012 tax forms ez Report the taxable amount shown in box 2a of Form 1099-R on line 16b of Form 1040 or line 12b of Form 1040A. 2012 tax forms ez Even though a corrective distribution of excess annual additions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. 2012 tax forms ez It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. 2012 tax forms ez Stock Options If you receive an option to buy or sell stock or other property as payment for your services, you may have income when you receive the option (the grant), when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option or property acquired through exercise of the option. 2012 tax forms ez The timing, type, and amount of income inclusion depend on whether you receive a nonstatutory stock option or a statutory stock option. 2012 tax forms ez Your employer can tell you which kind of option you hold. 2012 tax forms ez Nonstatutory Stock Options Grant of option. 2012 tax forms ez   If you are granted a nonstatutory stock option, you may have income when you receive the option. 2012 tax forms ez The amount of income to include and the time to include it depend on whether the fair market value of the option can be readily determined. 2012 tax forms ez The fair market value of an option can be readily determined if it is actively traded on an established market. 2012 tax forms ez    The fair market value of an option that is not traded on an established market can be readily determined only if all of the following conditions exist. 2012 tax forms ez You can transfer the option. 2012 tax forms ez You can exercise the option immediately in full. 2012 tax forms ez The option or the property subject to the option is not subject to any condition or restriction (other than a condition to secure payment of the purchase price) that has a significant effect on the fair market value of the option. 2012 tax forms ez The fair market value of the option privilege can be readily determined. 2012 tax forms ez The option privilege for an option to buy is the opportunity to benefit during the option's exercise period from any increase in the value of property subject to the option without risking any capital. 2012 tax forms ez For example, if during the exercise period the fair market value of stock subject to an option is greater than the option's exercise price, a profit may be realized by exercising the option and immediately selling the stock at its higher value. 2012 tax forms ez The option privilege for an option to sell is the opportunity to benefit during the exercise period from a decrease in the value of the property subject to the option. 2012 tax forms ez If you or a member of your family is an officer, director, or more-than-10% owner of an expatriated corporation, you may owe an excise tax on the value of nonstatutory options and other stock-based compensation from that corporation. 2012 tax forms ez For more information on the excise tax, see Internal Revenue Code section 4985. 2012 tax forms ez Option with readily determinable value. 2012 tax forms ez   If you receive a nonstatutory stock option that has a readily determinable fair market value at the time it is granted to you, the option is treated like other property received as compensation. 2012 tax forms ez See Restricted Property , later, for rules on how much income to include and when to include it. 2012 tax forms ez However, the rule described in that discussion for choosing to include the value of property in your income for the year of the transfer does not apply to a nonstatutory option. 2012 tax forms ez Option without readily determinable value. 2012 tax forms ez   If the fair market value of the option is not readily determinable at the time it is granted to you (even if it is determined later), you do not have income until you exercise or transfer the option. 2012 tax forms ez    Exercise or transfer of option. 2012 tax forms ez   When you exercise a nonstatutory stock option, the amount to include in your income depends on whether the option had a readily determinable value. 2012 tax forms ez Option with readily determinable value. 2012 tax forms ez   When you exercise a nonstatutory stock option that had a readily determinable value at the time the option was granted, you do not have to include any amount in income. 2012 tax forms ez Option without readily determinable value. 2012 tax forms ez   When you exercise a nonstatutory stock option that did not have a readily determinable value at the time the option was granted, the restricted prope
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Tax Exmept Bonds Questionnaires

Tax Exempt Bonds Compliance Check Questionnaire on Qualified School Construction Bond Issues (April 2012)
The Tax Exempt Bonds office (TEB) of the Tax Exempt and Government Entities division initiated a questionnaire project to evaluate the compliance and record retention policies, procedures, and practices of issuers of qualified school construction bonds (QSCBs).

Tax Exempt Bonds Compliance Check Questionnaire Project Final Report on Governmental and Charitable Financings (July 2011)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS final report on its Tax-Exempt Charitable Financings Compliance Check Questionnaire and Governmental Bond Financings Compliance Check Questionnaire projects.

Tax Exempt Bonds Compliance Check Questionnaire on Direct Pay Bonds (February 2010)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS conducted a compliance check questionnaire to evaluate the issuance and record retention policies, procedures and practices of issuers of direct pay build America bonds.

Tax Exempt Bonds Compliance Check Questionnaire on Advance Refunding Issues (July 2009)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division conducted a questionnaire project to evaluate the post-issuance compliance and record retention policies, procedures and practices of issuers and conduit borrowers of tax-exempt advance refunding bonds.

Page Last Reviewed or Updated: 26-Mar-2014

The 2012 Tax Forms Ez

2012 tax forms ez 16. 2012 tax forms ez   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. 2012 tax forms ez Exception 2. 2012 tax forms ez File Form 1099-B or Form 1099-S with the IRS. 2012 tax forms ez Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. 2012 tax forms ez . 2012 tax forms ez  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. 2012 tax forms ez Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). 2012 tax forms ez The discussion includes the following topics. 2012 tax forms ez How to report short-term gains and losses. 2012 tax forms ez How to report long-term gains and losses. 2012 tax forms ez How to figure capital loss carryovers. 2012 tax forms ez How to figure your tax on a net capital gain. 2012 tax forms ez If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). 2012 tax forms ez Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. 2012 tax forms ez Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). 2012 tax forms ez Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. 2012 tax forms ez Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. 2012 tax forms ez On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. 2012 tax forms ez , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). 2012 tax forms ez Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. 2012 tax forms ez Report short-term gains or losses in Part I. 2012 tax forms ez Report long-term gains or losses in Part II. 2012 tax forms ez Use as many Forms 8949 as you need. 2012 tax forms ez Exceptions to filing Form 8949 and Schedule D (Form 1040). 2012 tax forms ez   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). 2012 tax forms ez Exception 1. 2012 tax forms ez   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). 2012 tax forms ez (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. 2012 tax forms ez ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). 2012 tax forms ez Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. 2012 tax forms ez You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. 2012 tax forms ez Exception 2. 2012 tax forms ez   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. 2012 tax forms ez Installment sales. 2012 tax forms ez   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. 2012 tax forms ez You must report the entire gain in the year of sale (the year in which the trade date occurs). 2012 tax forms ez Passive activity gains and losses. 2012 tax forms ez    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. 2012 tax forms ez In some cases, the loss may be limited under the passive activity rules. 2012 tax forms ez Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. 2012 tax forms ez Form 1099-B transactions. 2012 tax forms ez   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. 2012 tax forms ez Use the Form 1099-B or the substitute statement to complete Form 8949. 2012 tax forms ez If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. 2012 tax forms ez This will help you complete Form 8949. 2012 tax forms ez Generally, a covered security is a security you acquired after 2010. 2012 tax forms ez   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2012 tax forms ez However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2012 tax forms ez    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). 2012 tax forms ez If you include an expense of sale in column (g), enter “E” in column (f). 2012 tax forms ez Form 1099-CAP transactions. 2012 tax forms ez   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. 2012 tax forms ez Use the Form 1099-CAP or substitute statement to fill in Form 8949. 2012 tax forms ez If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). 2012 tax forms ez You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. 2012 tax forms ez   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2012 tax forms ez Form 1099-S transactions. 2012 tax forms ez   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. 2012 tax forms ez    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). 2012 tax forms ez   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. 2012 tax forms ez   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. 2012 tax forms ez See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. 2012 tax forms ez However, report like-kind exchanges on Form 8824 instead. 2012 tax forms ez   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. 2012 tax forms ez Nominees. 2012 tax forms ez   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. 2012 tax forms ez File Form 1099-B or Form 1099-S with the IRS. 2012 tax forms ez   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. 2012 tax forms ez Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. 2012 tax forms ez S. 2012 tax forms ez Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). 2012 tax forms ez Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. 2012 tax forms ez On Form 1099-B, you should be listed as the “Payer. 2012 tax forms ez ” The other owner should be listed as the “Recipient. 2012 tax forms ez ” On Form 1099-S, you should be listed as the “Filer. 2012 tax forms ez ” The other owner should be listed as the “Transferor. 2012 tax forms ez ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. 2012 tax forms ez For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. 2012 tax forms ez If you are filing electronically see Publication 1220. 2012 tax forms ez Sale of property bought at various times. 2012 tax forms ez   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. 2012 tax forms ez Write “Various” in column (b) for the “Date acquired. 2012 tax forms ez ” Sale expenses. 2012 tax forms ez    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). 2012 tax forms ez If you include an expense of sale in column (g), enter “E” in column (f). 2012 tax forms ez   For more information about adjustments to basis, see chapter 13. 2012 tax forms ez Short-term gains and losses. 2012 tax forms ez   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. 2012 tax forms ez You report it in Part I of Form 8949. 2012 tax forms ez   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). 2012 tax forms ez Long-term gains and losses. 2012 tax forms ez    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. 2012 tax forms ez You report it in Part II of Form 8949. 2012 tax forms ez   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. 2012 tax forms ez    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). 2012 tax forms ez Total net gain or loss. 2012 tax forms ez   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). 2012 tax forms ez Enter the result on Schedule D (Form 1040), Part III, line 16. 2012 tax forms ez If your losses are more than your gains, see Capital Losses , next. 2012 tax forms ez If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. 2012 tax forms ez Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. 2012 tax forms ez Report the amount of the deduction on line 13 of Form 1040, in parentheses. 2012 tax forms ez Limit on deduction. 2012 tax forms ez   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). 2012 tax forms ez   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. 2012 tax forms ez Capital loss carryover. 2012 tax forms ez   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. 2012 tax forms ez If part of the loss is still unused, you can carry it over to later years until it is completely used up. 2012 tax forms ez   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. 2012 tax forms ez   When you carry over a loss, it remains long term or short term. 2012 tax forms ez A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. 2012 tax forms ez Figuring your carryover. 2012 tax forms ez   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. 2012 tax forms ez   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). 2012 tax forms ez    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. 2012 tax forms ez Example. 2012 tax forms ez Bob and Gloria sold securities in 2013. 2012 tax forms ez The sales resulted in a capital loss of $7,000. 2012 tax forms ez They had no other capital transactions. 2012 tax forms ez Their taxable income was $26,000. 2012 tax forms ez On their joint 2013 return, they can deduct $3,000. 2012 tax forms ez The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. 2012 tax forms ez If their capital loss had been $2,000, their capital loss deduction would have been $2,000. 2012 tax forms ez They would have no carryover. 2012 tax forms ez Use short-term losses first. 2012 tax forms ez   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. 2012 tax forms ez If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. 2012 tax forms ez Decedent's capital loss. 2012 tax forms ez    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. 2012 tax forms ez The capital loss limits discussed earlier still apply in this situation. 2012 tax forms ez The decedent's estate cannot deduct any of the loss or carry it over to following years. 2012 tax forms ez Joint and separate returns. 2012 tax forms ez   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. 2012 tax forms ez However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. 2012 tax forms ez Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. 2012 tax forms ez These lower rates are called the maximum capital gain rates. 2012 tax forms ez The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. 2012 tax forms ez For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. 2012 tax forms ez See Table 16-1 for details. 2012 tax forms ez If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. 2012 tax forms ez Example. 2012 tax forms ez All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. 2012 tax forms ez If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. 2012 tax forms ez Investment interest deducted. 2012 tax forms ez   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. 2012 tax forms ez Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. 2012 tax forms ez This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. 2012 tax forms ez For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. 2012 tax forms ez Table 16-1. 2012 tax forms ez What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . 2012 tax forms ez . 2012 tax forms ez . 2012 tax forms ez THEN your  maximum capital gain rate is . 2012 tax forms ez . 2012 tax forms ez . 2012 tax forms ez a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. 2012 tax forms ez 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. 2012 tax forms ez     Collectibles gain or loss. 2012 tax forms ez   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. 2012 tax forms ez   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. 2012 tax forms ez Gain on qualified small business stock. 2012 tax forms ez    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. 2012 tax forms ez The eligible gain minus your section 1202 exclusion is a 28% rate gain. 2012 tax forms ez See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. 2012 tax forms ez Unrecaptured section 1250 gain. 2012 tax forms ez    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. 2012 tax forms ez Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. 2012 tax forms ez For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. 2012 tax forms ez Tax computation using maximum capital gain rates. 2012 tax forms ez   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. 2012 tax forms ez You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. 2012 tax forms ez Schedule D Tax Worksheet. 2012 tax forms ez   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. 2012 tax forms ez Qualified Dividends and Capital Gain Tax Worksheet. 2012 tax forms ez   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. 2012 tax forms ez You received qualified dividends. 2012 tax forms ez (See Qualified Dividends in chapter 8. 2012 tax forms ez ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. 2012 tax forms ez (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. 2012 tax forms ez ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. 2012 tax forms ez Alternative minimum tax. 2012 tax forms ez   These capital gain rates are also used in figuring alternative minimum tax. 2012 tax forms ez Prev  Up  Next   Home   More Online Publications