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2012 tax 2. 2012 tax Employees' Pay Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tests for Deducting PayTest 1—Reasonableness Test 2—For Services Performed Kinds of PayAwards Bonuses Education Expenses Fringe Benefits Loans or Advances Property Reimbursements for Business Expenses Sick and Vacation Pay Introduction You can generally deduct the amount you pay your employees for the services they perform. 2012 tax The pay may be in cash, property, or services. 2012 tax It may include wages, salaries, bonuses, commissions, or other non-cash compensation such as vacation allowances and fringe benefits. 2012 tax For information about deducting employment taxes, see chapter 5. 2012 tax You can claim employment credits, such as the following, if you hire individuals who meet certain requirements. 2012 tax Empowerment zone employment credit (Form 8844). 2012 tax Indian employment credit (Form 8845). 2012 tax Work opportunity credit (Form 5884). 2012 tax Credit for employer differential wage payments (Form 8932). 2012 tax Reduce your deduction for employee wages by the amount of employment credits you claim. 2012 tax For more information about these credits, see the form on which the credit is claimed. 2012 tax Topics - This chapter discusses: Tests for deducting pay Kinds of pay Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits See chapter 12 for information about getting publications and forms. 2012 tax Tests for Deducting Pay To be deductible, your employees' pay must be an ordinary and necessary business expense and you must pay or incur it. 2012 tax These and other requirements that apply to all business expenses are explained in chapter 1. 2012 tax In addition, the pay must meet both of the following tests. 2012 tax Test 1. 2012 tax It must be reasonable. 2012 tax Test 2. 2012 tax It must be for services performed. 2012 tax The form or method of figuring the pay does not affect its deductibility. 2012 tax For example, bonuses and commissions based on sales or earnings, and paid under an agreement made before the services were performed, are both deductible. 2012 tax Test 1—Reasonableness You must be able to prove that the pay is reasonable. 2012 tax Whether the pay is reasonable depends on the circumstances that existed when you contracted for the services, not those that exist when reasonableness is questioned. 2012 tax If the pay is excessive, the excess pay is disallowed as a deduction. 2012 tax Factors to consider. 2012 tax Determine the reasonableness of pay by the facts and circumstances. 2012 tax Generally, reasonable pay is the amount that a similar business would pay for the same or similar services. 2012 tax To determine if pay is reasonable, also consider the following items and any other pertinent facts. 2012 tax The duties performed by the employee. 2012 tax The volume of business handled. 2012 tax The character and amount of responsibility. 2012 tax The complexities of your business. 2012 tax The amount of time required. 2012 tax The cost of living in the locality. 2012 tax The ability and achievements of the individual employee performing the service. 2012 tax The pay compared with the gross and net income of the business, as well as with distributions to shareholders if the business is a corporation. 2012 tax Your policy regarding pay for all your employees. 2012 tax The history of pay for each employee. 2012 tax Test 2—For Services Performed You must be able to prove the payment was made for services actually performed. 2012 tax Employee-shareholder salaries. 2012 tax If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed, the excessive part of the salary may be treated as a constructive dividend to the employee-shareholder. 2012 tax The excessive part of the salary would not be allowed as a salary deduction by the corporation. 2012 tax For more information on corporate distributions to shareholders, see Publication 542, Corporations. 2012 tax Kinds of Pay Some of the ways you may provide pay to your employees in addition to regular wages or salaries are discussed next. 2012 tax For specialized and detailed information on employees' pay and the employment tax treatment of employees' pay, see Publications 15, 15-A, and 15-B. 2012 tax Awards You can generally deduct amounts you pay to your employees as awards, whether paid in cash or property. 2012 tax If you give property to an employee as an employee achievement award, your deduction may be limited. 2012 tax Achievement awards. 2012 tax An achievement award is an item of tangible personal property that meets all the following requirements. 2012 tax It is given to an employee for length of service or safety achievement. 2012 tax It is awarded as part of a meaningful presentation. 2012 tax It is awarded under conditions and circumstances that do not create a significant likelihood of disguised pay. 2012 tax Length-of-service award. 2012 tax An award will qualify as a length-of-service award only if either of the following applies. 2012 tax The employee receives the award after his or her first 5 years of employment. 2012 tax The employee did not receive another length-of-service award (other than one of very small value) during the same year or in any of the prior 4 years. 2012 tax Safety achievement award. 2012 tax An award for safety achievement will qualify as an achievement award unless one of the following applies. 2012 tax It is given to a manager, administrator, clerical employee, or other professional employee. 2012 tax During the tax year, more than 10% of your employees, excluding those listed in (1), have already received a safety achievement award (other than one of very small value). 2012 tax Deduction limit. 2012 tax Your deduction for the cost of employee achievement awards given to any one employee during the tax year is limited to the following. 2012 tax $400 for awards that are not qualified plan awards. 2012 tax $1,600 for all awards, whether or not qualified plan awards. 2012 tax A qualified plan award is an achievement award given as part of an established written plan or program that does not favor highly compensated employees as to eligibility or benefits. 2012 tax A highly compensated employee is an employee who meets either of the following tests. 2012 tax The employee was a 5% owner at any time during the year or the preceding year. 2012 tax The employee received more than $115,000 in pay for the preceding year. 2012 tax You can choose to ignore test (2) if the employee was not also in the top 20% of employees ranked by pay for the preceding year. 2012 tax An award is not a qualified plan award if the average cost of all the employee achievement awards given during the tax year (that would be qualified plan awards except for this limit) is more than $400. 2012 tax To figure this average cost, ignore awards of nominal value. 2012 tax Deduct achievement awards as a nonwage business expense on your return or business schedule. 2012 tax You may not owe employment taxes on the value of some achievement awards you provide to an employee. 2012 tax See Publication 15-B. 2012 tax Bonuses You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services, not as a gift, and the services were performed. 2012 tax However, the total bonuses, salaries, and other pay must be reasonable for the services performed. 2012 tax If the bonus is paid in property, see Property , later. 2012 tax Gifts of nominal value. 2012 tax If, to promote employee goodwill, you distribute food or merchandise of nominal value to your employees at holidays, you can deduct the cost of these items as a nonwage business expense. 2012 tax Your deduction for de minimis gifts of food or drink are not subject to the 50% deduction limit that generally applies to meals. 2012 tax For more information on this deduction limit, see Meals and lodging , later. 2012 tax Education Expenses If you pay or reimburse education expenses for an employee, you can deduct the payments if they are part of a qualified educational assistance program. 2012 tax Deduct them on the “Employee benefit programs” or other appropriate line of your tax return. 2012 tax For information on educational assistance programs, see Educational Assistance in section 2 of Publication 15-B. 2012 tax Fringe Benefits A fringe benefit is a form of pay for the performance of services. 2012 tax You can generally deduct the cost of fringe benefits. 2012 tax You may be able to exclude all or part of the value of some fringe benefits from your employees' pay. 2012 tax You also may not owe employment taxes on the value of the fringe benefits. 2012 tax See Table 2-1, Special Rules for Various Types of Fringe Benefits, in Publication 15-B for details. 2012 tax Your deduction for the cost of fringe benefits for activities generally considered entertainment, amusement, or recreation, or for a facility used in connection with such an activity (for example, a company aircraft) for certain officers, directors, and more-than-10% shareholders is limited. 2012 tax Certain fringe benefits are discussed next. 2012 tax See Publication 15-B for more details on these and other fringe benefits. 2012 tax Meals and lodging. 2012 tax You can usually deduct the cost of furnishing meals and lodging to your employees. 2012 tax Deduct the cost in whatever category the expense falls. 2012 tax For example, if you operate a restaurant, deduct the cost of the meals you furnish to employees as part of the cost of goods sold. 2012 tax If you operate a nursing home, motel, or rental property, deduct the cost of furnishing lodging to an employee as expenses for utilities, linen service, salaries, depreciation, etc. 2012 tax Deduction limit on meals. 2012 tax You can generally deduct only 50% of the cost of furnishing meals to your employees. 2012 tax However, you can deduct the full cost of the following meals. 2012 tax Meals whose value you include in an employee's wages. 2012 tax Meals that qualify as a de minimis fringe benefit as discussed in section 2 of Publication 15-B. 2012 tax This generally includes meals you furnish to employees at your place of business if more than half of these employees are provided the meals for your convenience. 2012 tax Meals you furnish to your employees at the work site when you operate a restaurant or catering service. 2012 tax Meals you furnish to your employees as part of the expense of providing recreational or social activities, such as a company picnic. 2012 tax Meals you are required by federal law to furnish to crew members of certain commercial vessels (or would be required to furnish if the vessels were operated at sea). 2012 tax This does not include meals you furnish on vessels primarily providing luxury water transportation. 2012 tax Meals you furnish on an oil or gas platform or drilling rig located offshore or in Alaska. 2012 tax This includes meals you furnish at a support camp that is near and integral to an oil or gas drilling rig located in Alaska. 2012 tax Employee benefit programs. 2012 tax Employee benefit programs include the following. 2012 tax Accident and health plans. 2012 tax Adoption assistance. 2012 tax Cafeteria plans. 2012 tax Dependent care assistance. 2012 tax Education assistance. 2012 tax Life insurance coverage. 2012 tax Welfare benefit funds. 2012 tax You can generally deduct amounts you spend on employee benefit programs on the applicable line of your tax return. 2012 tax For example, if you provide dependent care by operating a dependent care facility for your employees, deduct your costs in whatever categories they fall (utilities, salaries, etc. 2012 tax ). 2012 tax Life insurance coverage. 2012 tax You cannot deduct the cost of life insurance coverage for you, an employee, or any person with a financial interest in your business, if you are directly or indirectly the beneficiary of the policy. 2012 tax See Regulations section 1. 2012 tax 264-1 for more information. 2012 tax Welfare benefit funds. 2012 tax A welfare benefit fund is a funded plan (or a funded arrangement having the effect of a plan) that provides welfare benefits to your employees, independent contractors, or their beneficiaries. 2012 tax Welfare benefits are any benefits other than deferred compensation or transfers of restricted property. 2012 tax Your deduction for contributions to a welfare benefit fund is limited to the fund's qualified cost for the tax year. 2012 tax If your contributions to the fund are more than its qualified cost, carry the excess over to the next tax year. 2012 tax Generally, the fund's “qualified cost” is the total of the following amounts, reduced by the after-tax income of the fund. 2012 tax The cost you would have been able to deduct using the cash method of accounting if you had paid for the benefits directly. 2012 tax The contributions added to a reserve account that are needed to fund claims incurred but not paid as of the end of the year. 2012 tax These claims can be for supplemental unemployment benefits, severance pay, or disability, medical, or life insurance benefits. 2012 tax For more information, see sections 419(c) and 419A of the Internal Revenue Code and the related regulations. 2012 tax Loans or Advances You generally can deduct as wages an advance you make to an employee for services performed if you do not expect the employee to repay the advance. 2012 tax However, if the employee performs no services, treat the amount you advanced as a loan. 2012 tax If the employee does not repay the loan, treat it as income to the employee. 2012 tax Below-market interest rate loans. 2012 tax On certain loans you make to an employee or shareholder, you are treated as having received interest income and as having paid compensation or dividends equal to that interest. 2012 tax See Below-Market Loans in chapter 4. 2012 tax Property If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. 2012 tax The amount you can deduct is the property's fair market value on the date of the transfer less any amount the employee paid for the property. 2012 tax You can claim the deduction only for the tax year in which your employee includes the property's value in income. 2012 tax Your employee is deemed to have included the value in income if you report it on Form W-2, Wage and Tax Statement, in a timely manner. 2012 tax You treat the deductible amount as received in exchange for the property, and you must recognize any gain or loss realized on the transfer, unless it is the company's stock transferred as payment for services. 2012 tax Your gain or loss is the difference between the fair market value of the property and its adjusted basis on the date of transfer. 2012 tax These rules also apply to property transferred to an independent contractor for services, generally reported on Form 1099-MISC, Miscellaneous Income. 2012 tax Restricted property. 2012 tax If the property you transfer for services is subject to restrictions that affect its value, you generally cannot deduct it and do not report gain or loss until it is substantially vested in the recipient. 2012 tax However, if the recipient pays for the property, you must report any gain at the time of the transfer up to the amount paid. 2012 tax “Substantially vested” means the property is not subject to a substantial risk of forfeiture. 2012 tax This means that the recipient is not likely to have to give up his or her rights in the property in the future. 2012 tax Reimbursements for Business Expenses You can generally deduct the amount you pay or reimburse employees for business expenses incurred for your business. 2012 tax However, your deduction may be limited. 2012 tax If you make the payment under an accountable plan, deduct it in the category of the expense paid. 2012 tax For example, if you pay an employee for travel expenses incurred on your behalf, deduct this payment as a travel expense. 2012 tax If you make the payment under a nonaccountable plan, deduct it as wages and include it in the employee's Form W-2. 2012 tax See Reimbursement of Travel, Meals, and Entertainment in chapter 11 for more information about deducting reimbursements and an explanation of accountable and nonaccountable plans. 2012 tax Sick and Vacation Pay Sick pay. 2012 tax You can deduct amounts you pay to your employees for sickness and injury, including lump-sum amounts, as wages. 2012 tax However, your deduction is limited to amounts not compensated by insurance or other means. 2012 tax Vacation pay. 2012 tax Vacation pay is an employee benefit. 2012 tax It includes amounts paid for unused vacation leave. 2012 tax You can deduct vacation pay only in the tax year in which the employee actually receives it. 2012 tax This rule applies regardless of whether you use the cash or accrual method of accounting. 2012 tax Prev Up Next Home More Online Publications
IRS Releases the Dirty Dozen Tax Scams for 2013
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IR-2013-33, March 26, 2013
WASHINGTON — The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.
The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.
"This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud," said IRS Acting Commissioner Steven T. Miller. "The Dirty Dozen list shows that scams come in many forms during filing season. Don't let a scam artist steal from you or talk you into doing something you will regret later."
Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.
The following are the Dirty Dozen tax scams for 2013:
Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Identity theft occurs when someone uses your personal information such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.
Combating identity theft and refund fraud is a top priority for the IRS, and we are taking special steps to assist victims. For the 2013 tax season, the IRS has put in place a number of additional steps to prevent identity theft and detect refund fraud before it occurs. We have dramatically enhanced our systems, and we are committed to continuing to improve our prevention, detection and assistance efforts.
The IRS has a comprehensive and aggressive identity theft strategy employing a three-pronged effort focusing on fraud prevention, early detection and victim assistance. We are continually reviewing our processes and policies to ensure that we are doing everything possible to minimize identity theft incidents, to help those victimized by it and to investigate those who are committing the crimes.
The IRS continues to increase its efforts against refund fraud, which includes identity theft. During 2012, the IRS prevented the issuance of $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.
This January, the IRS also conducted a coordinated and highly successful identity theft enforcement sweep. The coast-to-coast effort against identity theft suspects led to 734 enforcement actions in January, including 298 indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012. The Criminal Investigation unit has devoted more than 500,000 staff-hours to fighting this issue.
We know identity theft is a frustrating and complex process for victims. The IRS has 3,000 people working on identity theft related cases — more than double the number in late 2011. And we have trained 35,000 employees who work with taxpayers to help with identity theft situations.
The IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and an assistance guide. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.
Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. Taxpayers can call the IRS Identity Protection Specialized Unit at 800-908-4490. More information can be found on the special identity protection page.
Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to email@example.com.
It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information that can help you protect yourself from email scams.
Return Preparer Fraud
About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns. Most return preparers provide honest service to their clients. But some unscrupulous preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft.
It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).
The IRS also has created a new web page to assist taxpayers. For tips about choosing a preparer, red flags, details on preparer qualifications and information on how and when to make a complaint, visit www.irs.gov/chooseataxpro.
Remember: Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.
IRS.gov has general information on reporting tax fraud. More specifically, report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes a return address.
Hiding Income Offshore
Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.
The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.
While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.
Since 2009, 38,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.
At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with DOJ to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.
The IRS has collected $5.5 billion so far from people who participated in offshore voluntary disclosure programs since 2009.
“Free Money” from the IRS & Tax Scams Involving Social Security
Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes promise refunds to people who have little or no income and normally don’t have a tax filing requirement – and are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.
Scammers prey on low income individuals and the elderly and members of church congregations with bogus promises of free money. They build false hopes and charge people good money for bad advice including encouraging taxpayers to make fictitious claims for refunds or rebates based on false statements of entitlement to tax credits. For example, some promoters claim they can obtain for their victims, often senior citizens, a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college. Con artists also falsely claim that refunds are available even if the victim went to school decades ago. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.
There are also a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return.
Beware: Intentional mistakes of this kind can result in a $5,000 penalty.
Impersonation of Charitable Organizations
Another long-standing type of abuse or fraud is scams that occur in the wake of significant natural disasters.
Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.
They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims. As in the case of a recent disaster, Hurricane Sandy, the IRS cautions both victims of natural disasters and people wishing to make charitable donations to avoid scam artists by following these tips:
- To help disaster victims, donate to recognized charities.
- Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible.
- Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money.
- Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
Call the IRS toll-free disaster assistance telephone number (1-866-562-5227) if you are a disaster victim with specific questions about tax relief or disaster related tax issues.
False/Inflated Income and Expenses
Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions. This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.
Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit although they were not eligible. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.
False Form 1099 Refund Claims
In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return.
Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.
Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.
Falsely Claiming Zero Wages
Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.
Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.
Disguised Corporate Ownership
Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.
These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.
Misuse of Trusts
For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.
IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.
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Page Last Reviewed or Updated: 07-Mar-2014
The 2012 Tax
2012 tax Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. 2012 tax Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. 2012 tax Adjusted basis for installment sale, Adjusted basis for installment sale purposes. 2012 tax Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. 2012 tax Alternative Depreciation System (ADS), Required use of ADS. 2012 tax , ADS election. 2012 tax Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. 2012 tax B Bankruptcy, Bankruptcy. 2012 tax Barter income, Barter income. 2012 tax Basis Adjusted, Adjusted basis. 2012 tax Installment sale, Adjusted basis for installment sale purposes. 2012 tax Involuntary conversion, Basis for depreciation. 2012 tax Like-kind exchange, Basis for depreciation. 2012 tax Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. 2012 tax Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. 2012 tax Constructing assets, Constructing assets. 2012 tax Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. 2012 tax Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. 2012 tax Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. 2012 tax Casualty, defined, Casualty. 2012 tax Disaster area losses, Disaster Area Losses Leased property, Leased property. 2012 tax Livestock, Livestock or produce bought for resale. 2012 tax , Raised draft, breeding, dairy, or sporting animals. 2012 tax Reimbursement, Insurance and other reimbursements. 2012 tax Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. 2012 tax Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. 2012 tax Christmas trees, Christmas tree cultivation. 2012 tax , Christmas trees. 2012 tax Club dues, Club dues and membership fees. 2012 tax Comments on publication, Comments and suggestions. 2012 tax Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. 2012 tax Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. 2012 tax , Community property. 2012 tax Computer, software, Computer software. 2012 tax Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. 2012 tax Conservation Reserve Program, Conservation Reserve Program (CRP) payments. 2012 tax Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. 2012 tax Constructive receipt of income, Constructive receipt. 2012 tax Contamination, Soil or other environmental contamination. 2012 tax Contract price, Contract price. 2012 tax Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. 2012 tax , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. 2012 tax , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. 2012 tax Social security coverage, How to become insured under social security. 2012 tax State unemployment tax, Tax rate and credit. 2012 tax Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. 2012 tax Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. 2012 tax Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. 2012 tax , Section 1231 transactions. 2012 tax , Gain or loss. 2012 tax Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. 2012 tax Canceled, Cancellation of Debt, Canceled debt excluded from income. 2012 tax , Cancellation of debt. 2012 tax , Canceled debt. 2012 tax Nonrecourse, Amount realized on a nonrecourse debt. 2012 tax Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. 2012 tax Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. 2012 tax Conservation assets, Depreciable conservation assets. 2012 tax Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. 2012 tax Listed property, Additional Rules for Listed Property Raised livestock, Livestock. 2012 tax Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. 2012 tax Depreciation allowed, Basis adjustment for depreciation allowed or allowable. 2012 tax Direct payments, Direct payments and counter-cyclical payments. 2012 tax , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. 2012 tax Disaster relief payments, Qualified disaster relief payments. 2012 tax Dispositions, Sale or other disposal of land during 9-year period. 2012 tax , Gain on sale of farmland. 2012 tax , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. 2012 tax , Easements. 2012 tax Election ADS depreciation, Electing ADS. 2012 tax , ADS election. 2012 tax Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. 2012 tax Cutting of timber, Election to treat cutting as a sale or exchange. 2012 tax Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. 2012 tax Out of installment method, Electing out of the installment method. 2012 tax Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. 2012 tax Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. 2012 tax Employer identification number, Reminders, Employer identification number (EIN). 2012 tax Endangered species recovery expenses, Endangered species recovery expenses. 2012 tax Environmental contamination, Soil or other environmental contamination. 2012 tax Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). 2012 tax , Fair market value (FMV). 2012 tax Family member Business expenses, Special rule for related persons. 2012 tax Installment sale, Sale to a related person. 2012 tax Like-kind exchange, Like-kind exchanges between related persons. 2012 tax Loss on sale or exchange of property, Losses from sales or exchanges between related persons. 2012 tax Personal-use property, Personal-use property. 2012 tax Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. 2012 tax , Farm. 2012 tax Income averaging, Income Averaging for Farmers Rental, Farm rental. 2012 tax Sale of, Sale of a Farm Farmer, Farmer. 2012 tax Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. 2012 tax Form 1099-A, Form 1099-A. 2012 tax , Forms 1099-A and 1099-C. 2012 tax 1099-C, Cancellation of Debt, Form 1099-C. 2012 tax , Forms 1099-A and 1099-C. 2012 tax 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. 2012 tax 1099-PATR, Form 1099-PATR. 2012 tax 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. 2012 tax , Recapture. 2012 tax , Reporting the exchange. 2012 tax 4835, Rents (Including Crop Shares) 5213, Using the presumption later. 2012 tax 6252, Form 6252. 2012 tax 8822, Reminders 8824, Reporting the exchange. 2012 tax 8849, Claiming a Refund 8886, Reminders 940, Form 940. 2012 tax 943, Form 943. 2012 tax 982, Form 982 I-9, Form I-9. 2012 tax SS-4, Reminders, Employer identification number (EIN). 2012 tax SS-5, Obtaining a social security number. 2012 tax T (Timber), Form T (Timber). 2012 tax W-2, Form W-2. 2012 tax W-4, Reminders, New hire reporting. 2012 tax , Form W-4. 2012 tax W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. 2012 tax Free tax services, How To Get Tax Help, Free help with your tax return. 2012 tax Fuel tax credit or refund, Fuel tax credit and refund. 2012 tax , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). 2012 tax , Cost related to gifts. 2012 tax , Property Received as a Gift, Gift. 2012 tax Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. 2012 tax Gross profit percentage, Gross profit percentage. 2012 tax Gross profit, defined, Gross profit. 2012 tax Guarantee, Debt not payable on demand. 2012 tax H Health insurance deduction, Self-employed health insurance deduction. 2012 tax Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. 2012 tax Holding period, Holding period. 2012 tax Horticultural structure, Horticultural structure. 2012 tax I Illegal irrigation subsidy, Illegal federal irrigation subsidy. 2012 tax Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. 2012 tax , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. 2012 tax Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. 2012 tax Inherited property, Inherited Property Insolvency, Insolvency. 2012 tax Installment sales, Form 6252. 2012 tax Electing out, Electing out of the installment method. 2012 tax Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. 2012 tax Unstated interest, Unstated interest. 2012 tax Insurance, Insurance, Self-employed health insurance deduction. 2012 tax Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. 2012 tax Unstated, Unstated interest. 2012 tax Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. 2012 tax Involuntary conversions, Involuntary Conversions, Property acquired in a like-kind exchange or involuntary conversion. 2012 tax , Introduction Irrigation Illegal subsidy, Illegal federal irrigation subsidy. 2012 tax Project, Irrigation Project L Labor hired, Labor Hired Landlord participation, Landlord Participation in Farming Lease or purchase, Lease or Purchase Life tenant (see Term interests) Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Lime, Fertilizer and Lime Limits At-risk, At-Risk Limits Business use of home, Deduction limit. 2012 tax Capital losses, Treatment of Capital Losses Conservation expenses, Assessment for Depreciable Property, 25% Limit on Deduction Depreciation Business-use, What Is the Business-Use Requirement? Excluded farm debt, Exclusion limit. 2012 tax Farm losses, Losses From Operating a Farm Loss of personal-use property, Deduction Limits on Losses of Personal-Use Property Not-for-profit farming, Not-for-Profit Farming Passive activity, Passive Activity Limits Percentage depletion, Taxable income limit. 2012 tax Prepaid farm supplies, Deduction limit. 2012 tax Reforestation costs, Reforestation Costs Section 179 expense deduction Automobile, Limits for passenger automobiles. 2012 tax Business income, Business Income Limit Dollar, Dollar Limits Time to keep records, How Long To Keep Records Listed property Defined, What Is Listed Property? Passenger automobile, Passenger automobiles. 2012 tax Rules, Additional Rules for Listed Property Livestock, Section 1231 transactions. 2012 tax Casualty and theft losses, Livestock or produce bought for resale. 2012 tax Crop shares, Crop shares you use to feed livestock. 2012 tax Depreciation, Livestock. 2012 tax Diseased, Diseased livestock. 2012 tax Feed assistance, Feed Assistance and Payments Immature, Immature livestock. 2012 tax Losses, Loss of livestock. 2012 tax , Livestock Purchased, Purchased livestock. 2012 tax Raised, Raised livestock. 2012 tax Sale of, Sales of Farm Products, Livestock Unit-livestock-price, inventory valuation, Unit-livestock-price method. 2012 tax Used in a farm business, Livestock used in farm business. 2012 tax Weather-related sales, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. 2012 tax Loans, Commodity Credit Corporation (CCC) Loans, Loan expenses. 2012 tax Losses At-risk limits, At-Risk Limits Casualty, Casualties, Thefts, and Condemnations Disaster areas, Disaster Area Losses Farming, Farming Losses Growing crops, Loss of growing plants, produce, and crops. 2012 tax Hobby farming, Not-for-Profit Farming Livestock, Livestock, Diseased livestock. 2012 tax Nondeductible, Other Nondeductible Items Theft, Casualties, Thefts, and Condemnations Lost income payments, Lost income payments. 2012 tax Lost property, Mislaid or lost property. 2012 tax M MACRS property Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. 2012 tax Like-kind exchange, Property acquired in a like-kind exchange or involuntary conversion. 2012 tax Nontaxable transfer, Property acquired in a nontaxable transfer. 2012 tax Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. 2012 tax Membership fees, Club dues and membership fees. 2012 tax Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. 2012 tax Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. 2012 tax Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. 2012 tax Nontaxable transfer, Property acquired in a nontaxable transfer. 2012 tax Percentage tables, Rules for using the tables. 2012 tax Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. 2012 tax Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. 2012 tax Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. 2012 tax P Partners, limited, Limited partner. 2012 tax Partners, retired, Retired partner. 2012 tax Partners, Spouse, Business Owned and Operated by Spouses. 2012 tax Partnership, Partnership income or loss. 2012 tax Passenger automobile, Passenger automobiles. 2012 tax Pasture income, Pasture income and rental. 2012 tax Patronage dividends, Patronage Dividends Payments considered received, Payments Received or Considered Received Payments received, Payments Received or Considered Received Penalties Estimated tax, Estimated Tax Penalty for 2013 Returns, Estimated Tax Penalty for 2013 Trust fund recovery, Trust fund recovery penalty. 2012 tax Per-unit retain certificates, Per-Unit Retain Certificates Personal expenses, Personal, Living, and Family Expenses Placed in service, Placed in Service, What Is the Placed-in-Service Date? Postponing casualty gain, Postponing Gain Prepaid expense Advance premiums, Advance premiums. 2012 tax Extends useful life, Prepayment. 2012 tax Farm supplies, Prepaid Farm Supplies Livestock feed, Prepaid Livestock Feed Prizes, Prizes. 2012 tax Produce, Sales of Farm Products Property Changed to business use, Property changed from personal to business or rental use. 2012 tax Received for services, Property received for services. 2012 tax Repairs and improvements, How Do You Treat Repairs and Improvements? Section 1231, Section 1231 transactions. 2012 tax Section 1245, Section 1245 Property Section 1250, Section 1250 Property Section 1252, Section 1252 property. 2012 tax Section 1255, Section 1255 property. 2012 tax Tangible personal, Tangible personal property. 2012 tax Publications (see Tax help) Q Qualified disaster relief payments, Qualified disaster relief payments. 2012 tax Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. 2012 tax Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. 2012 tax Basis reductions, Recapture of basis reductions. 2012 tax Certain depreciation, Recapture of certain depreciation. 2012 tax Cost-sharing payments, Recapture. 2012 tax Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. 2012 tax Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. 2012 tax Special depreciation allowance, When Must You Recapture an Allowance Recordkeeping, Importance of Records, Meals. 2012 tax Records on depreciable property, Depreciation Recapture Reforestation costs, Forestation and reforestation costs. 2012 tax , Reforestation Costs Refund Deduction taken, Refund or reimbursement. 2012 tax Fuel tax, Fuel tax credit and refund. 2012 tax , Including the Credit or Refund in Income Reimbursements Casualties and thefts, Casualty and theft losses. 2012 tax , Casualties and Thefts, Insurance and other reimbursements. 2012 tax Deduction taken, Refund or reimbursement. 2012 tax Expenses, Reimbursed expenses. 2012 tax Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. 2012 tax Reforestation expenses, Qualifying costs. 2012 tax To employees, Reimbursements to employees. 2012 tax Related persons, Special rule for related persons. 2012 tax , Losses from sales or exchanges between related persons. 2012 tax , Special rules for related persons. 2012 tax , Like-kind exchanges between related persons. 2012 tax , Sale to a related person. 2012 tax , Buying replacement property from a related person. 2012 tax , Related persons. 2012 tax Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. 2012 tax Repairs, Repairs and Maintenance Repairs and improvements, How Do You Treat Repairs and Improvements? Repayment of income, Repayment of income. 2012 tax Replacement Period, Replacement Period Property, Replacement Property Reportable transactions. 2012 tax , Reminders Repossessions, Foreclosure or Repossession Right-of-way income, Easements and rights-of-way. 2012 tax S Sale of home, Sale of your home. 2012 tax Section 179 expense deduction, Section 179 Expense Deduction How to elect, How Do You Elect the Deduction? Listed property, Additional Rules for Listed Property Qualifying property, What Property Qualifies? Recapture, When Must You Recapture the Deduction? Self-employed health insurance, Self-employed health insurance deduction. 2012 tax Self-employed health insurance deduction, Self-employed health insurance deduction. 2012 tax Self-employment tax Community property, Community property. 2012 tax Deduction, Deduction for employer-equivalent portion of self-employment tax. 2012 tax How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. 2012 tax Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. 2012 tax Share farming, Share farmer. 2012 tax Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. 2012 tax Selling price Defined, Selling price. 2012 tax Reduced, Selling price reduced. 2012 tax Settlement costs (fees), Settlement costs. 2012 tax Social security and Medicare Credits of coverage, Earning credits in 2013. 2012 tax Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. 2012 tax Software, computer, Computer software. 2012 tax Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. 2012 tax Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. 2012 tax Start-up costs for businesses, Business start-up and organizational costs. 2012 tax Suggestions for publication, Comments and suggestions. 2012 tax T Tangible personal property, Tangible personal property. 2012 tax Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. 2012 tax Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. 2012 tax Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. 2012 tax General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. 2012 tax State and local general sales, State and local general sales taxes. 2012 tax Withholding, Federal income tax withholding. 2012 tax , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. 2012 tax Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. 2012 tax Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. 2012 tax , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. 2012 tax TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. 2012 tax Unstated interest, Unstated interest. 2012 tax W Wages and salaries, Wages and salaries. 2012 tax Water conservation, Conservation Expenses Water well, Water well. 2012 tax , Water wells. 2012 tax Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. 2012 tax Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev Up Home More Online Publications