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Do state taxes online free 12. Do state taxes online free   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Do state taxes online free Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. Do state taxes online free  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. Do state taxes online free 5 cents per mile. Do state taxes online free For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. Do state taxes online free Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Do state taxes online free To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. Do state taxes online free What is the tax benefit of taking a business deduction for work-related education. Do state taxes online free   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Do state taxes online free Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Do state taxes online free An itemized deduction reduces the amount of your income subject to tax. Do state taxes online free   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Do state taxes online free This reduces the amount of your income subject to both income tax and self-employment tax. Do state taxes online free   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. Do state taxes online free You may qualify for these other benefits even if you do not meet the requirements listed above. Do state taxes online free   Also, your work-related education expenses may qualify you to claim more than one tax benefit. Do state taxes online free Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Do state taxes online free Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Do state taxes online free This is education that meets at least one of the following two tests. Do state taxes online free The education is required by your employer or the law to keep your present salary, status, or job. Do state taxes online free The required education must serve a bona fide business purpose of your employer. Do state taxes online free The education maintains or improves skills needed in your present work. Do state taxes online free However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Do state taxes online free You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Do state taxes online free Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. Do state taxes online free Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Do state taxes online free This additional education is qualifying work-related education if all three of the following requirements are met. Do state taxes online free It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Do state taxes online free When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Do state taxes online free See Education To Maintain or Improve Skills , later. Do state taxes online free Example. Do state taxes online free You are a teacher who has satisfied the minimum requirements for teaching. Do state taxes online free Your employer requires you to take an additional college course each year to keep your teaching job. Do state taxes online free If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Do state taxes online free This image is too large to be displayed in the current screen. Do state taxes online free Please click the link to view the image. Do state taxes online free Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Do state taxes online free This could include refresher courses, courses on current developments, and academic or vocational courses. Do state taxes online free Example. Do state taxes online free You repair televisions, radios, and stereo systems for XYZ Store. Do state taxes online free To keep up with the latest changes, you take special courses in radio and stereo service. Do state taxes online free These courses maintain and improve skills required in your work. Do state taxes online free Maintaining skills vs. Do state taxes online free qualifying for new job. Do state taxes online free   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Do state taxes online free Education during temporary absence. Do state taxes online free   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Do state taxes online free Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Do state taxes online free Example. Do state taxes online free You quit your biology research job to become a full-time biology graduate student for 1 year. Do state taxes online free If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Do state taxes online free Education during indefinite absence. Do state taxes online free   If you stop work for more than a year, your absence from your job is considered indefinite. Do state taxes online free Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Do state taxes online free Therefore, it is not qualifying work-related education. Do state taxes online free Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Do state taxes online free The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Do state taxes online free Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Do state taxes online free This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Do state taxes online free You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Do state taxes online free Example 1. Do state taxes online free You are a full-time engineering student. Do state taxes online free Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Do state taxes online free Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Do state taxes online free The education is not qualifying work-related education. Do state taxes online free Example 2. Do state taxes online free You are an accountant and you have met the minimum educational requirements of your employer. Do state taxes online free Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Do state taxes online free These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Do state taxes online free Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Do state taxes online free The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Do state taxes online free If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Do state taxes online free The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Do state taxes online free You generally will be considered a faculty member when one or more of the following occurs. Do state taxes online free You have tenure. Do state taxes online free Your years of service count toward obtaining tenure. Do state taxes online free You have a vote in faculty decisions. Do state taxes online free Your school makes contributions for you to a retirement plan other than social security or a similar program. Do state taxes online free Example 1. Do state taxes online free The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Do state taxes online free In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Do state taxes online free If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Do state taxes online free However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Do state taxes online free Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Do state taxes online free If you have all the required education except the fifth year, you have met the minimum educational requirements. Do state taxes online free The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Do state taxes online free Example 2. Do state taxes online free Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Do state taxes online free The additional four education courses can be qualifying work-related education. Do state taxes online free Although you do not have all the required courses, you have already met the minimum educational requirements. Do state taxes online free Example 3. Do state taxes online free Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Do state taxes online free The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Do state taxes online free They are needed to meet the minimum educational requirements for employment as a teacher. Do state taxes online free Example 4. Do state taxes online free You have a bachelor's degree and you work as a temporary instructor at a university. Do state taxes online free At the same time, you take graduate courses toward an advanced degree. Do state taxes online free The rules of the university state that you can become a faculty member only if you get a graduate degree. Do state taxes online free Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Do state taxes online free You have not met the minimum educational requirements to qualify you as a faculty member. Do state taxes online free The graduate courses are not qualifying work-related education. Do state taxes online free Certification in a new state. Do state taxes online free   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Do state taxes online free This is true even if you must get additional education to be certified in another state. Do state taxes online free Any additional education you need is qualifying work-related education. Do state taxes online free You have already met the minimum requirements for teaching. Do state taxes online free Teaching in another state is not a new trade or business. Do state taxes online free Example. Do state taxes online free You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Do state taxes online free You move to State B and are promptly hired as a teacher. Do state taxes online free You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Do state taxes online free These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Do state taxes online free Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Do state taxes online free This is true even if you do not plan to enter that trade or business. Do state taxes online free If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Do state taxes online free Example 1. Do state taxes online free You are an accountant. Do state taxes online free Your employer requires you to get a law degree at your own expense. Do state taxes online free You register at a law school for the regular curriculum that leads to a law degree. Do state taxes online free Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Do state taxes online free Example 2. Do state taxes online free You are a general practitioner of medicine. Do state taxes online free You take a 2-week course to review developments in several specialized fields of medicine. Do state taxes online free The course does not qualify you for a new profession. Do state taxes online free It is qualifying work- related education because it maintains or improves skills required in your present profession. Do state taxes online free Example 3. Do state taxes online free While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Do state taxes online free The program will lead to qualifying you to practice psychoanalysis. Do state taxes online free The psychoanalytic training does not qualify you for a new profession. Do state taxes online free It is qualifying work-related education because it maintains or improves skills required in your present profession. Do state taxes online free Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Do state taxes online free They are part of a program of study that can qualify you for a new profession. Do state taxes online free Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Do state taxes online free A change in duties in any of the following ways is not considered a change to a new business. Do state taxes online free Elementary school teacher to secondary school teacher. Do state taxes online free Teacher of one subject, such as biology, to teacher of another subject, such as art. Do state taxes online free Classroom teacher to guidance counselor. Do state taxes online free Classroom teacher to school administrator. Do state taxes online free What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. Do state taxes online free If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Do state taxes online free You cannot deduct expenses related to tax-exempt and excluded income. Do state taxes online free Deductible expenses. Do state taxes online free   The following education expenses can be deducted. Do state taxes online free Tuition, books, supplies, lab fees, and similar items. Do state taxes online free Certain transportation and travel costs. Do state taxes online free Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Do state taxes online free Nondeductible expenses. Do state taxes online free   You cannot deduct personal or capital expenses. Do state taxes online free For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Do state taxes online free This amount is a personal expense. Do state taxes online free Unclaimed reimbursement. Do state taxes online free   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Do state taxes online free Example. Do state taxes online free Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Do state taxes online free You do not file a voucher and you do not get reimbursed. Do state taxes online free Because you did not file a voucher, you cannot deduct the expenses on your tax return. Do state taxes online free Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Do state taxes online free If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Do state taxes online free Temporary basis. Do state taxes online free   You go to school on a temporary basis if either of the following situations applies to you. Do state taxes online free Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Do state taxes online free Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Do state taxes online free Your attendance is temporary up to the date you determine it will last more than 1 year. Do state taxes online free If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. Do state taxes online free Attendance not on a temporary basis. Do state taxes online free   You do not go to school on a temporary basis if either of the following situations apply to you. Do state taxes online free Your attendance at school is realistically expected to last more than 1 year. Do state taxes online free It does not matter how long you actually attend. Do state taxes online free Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Do state taxes online free Your attendance is not temporary after the date you determine it will last more than 1 year. Do state taxes online free Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Do state taxes online free This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Do state taxes online free Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Do state taxes online free Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Do state taxes online free Example 1. Do state taxes online free You regularly work in a nearby town, and go directly from work to home. Do state taxes online free You also attend school every work night for 3 months to take a course that improves your job skills. Do state taxes online free Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Do state taxes online free This is true regardless of the distance traveled. Do state taxes online free Example 2. Do state taxes online free Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Do state taxes online free You can deduct your transportation expenses from your regular work site to school and then home. Do state taxes online free Example 3. Do state taxes online free Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Do state taxes online free Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Do state taxes online free Example 4. Do state taxes online free Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Do state taxes online free Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Do state taxes online free If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Do state taxes online free If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Do state taxes online free Using your car. Do state taxes online free    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Do state taxes online free The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. Do state taxes online free 5 cents per mile. Do state taxes online free Whichever method you use, you can also deduct parking fees and tolls. Do state taxes online free See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. Do state taxes online free Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Do state taxes online free Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Do state taxes online free For more information, see chapter 1 of Publication 463. Do state taxes online free You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. Do state taxes online free Mainly personal travel. Do state taxes online free   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Do state taxes online free You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Do state taxes online free   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Do state taxes online free An important factor is the comparison of time spent on personal activities with time spent on educational activities. Do state taxes online free If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Do state taxes online free Example 1. Do state taxes online free John works in Newark, New Jersey. Do state taxes online free He traveled to Chicago to take a deductible 1-week course at the request of his employer. Do state taxes online free His main reason for going to Chicago was to take the course. Do state taxes online free While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Do state taxes online free Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Do state taxes online free He cannot deduct his transportation expenses of going to Pleasantville. Do state taxes online free He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Do state taxes online free Example 2. Do state taxes online free Sue works in Boston. Do state taxes online free She went to a university in Michigan to take a course for work. Do state taxes online free The course is qualifying work-related education. Do state taxes online free She took one course, which is one-fourth of a full course load of study. Do state taxes online free She spent the rest of the time on personal activities. Do state taxes online free Her reasons for taking the course in Michigan were all personal. Do state taxes online free Sue's trip is mainly personal because three-fourths of her time is considered personal time. Do state taxes online free She cannot deduct the cost of her round-trip train ticket to Michigan. Do state taxes online free She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Do state taxes online free Example 3. Do state taxes online free Dave works in Nashville and recently traveled to California to take a 2-week seminar. Do state taxes online free The seminar is qualifying work-related education. Do state taxes online free While there, he spent an extra 8 weeks on personal activities. Do state taxes online free The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Do state taxes online free Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Do state taxes online free He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Do state taxes online free Cruises and conventions. Do state taxes online free   Certain cruises and conventions offer seminars or courses as part of their itinerary. Do state taxes online free Even if the seminars or courses are work related, your deduction for travel may be limited. Do state taxes online free This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Do state taxes online free   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Do state taxes online free 50% limit on meals. Do state taxes online free   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Do state taxes online free If you were reimbursed for the meals, see How To Treat Reimbursements , later. Do state taxes online free   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Do state taxes online free Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Do state taxes online free Example. Do state taxes online free You are a French language teacher. Do state taxes online free While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Do state taxes online free You chose your itinerary and most of your activities to improve your French language skills. Do state taxes online free You cannot deduct your travel expenses as education expenses. Do state taxes online free This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Do state taxes online free No Double Benefit Allowed You cannot do either of the following. Do state taxes online free Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. Do state taxes online free Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Do state taxes online free See Adjustments to Qualifying Work-Related Education Expenses, next. Do state taxes online free Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Do state taxes online free You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Do state taxes online free Tax-free educational assistance. Do state taxes online free   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Do state taxes online free Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Do state taxes online free Amounts that do not reduce qualifying work-related education expenses. Do state taxes online free   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Do state taxes online free Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Do state taxes online free How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Do state taxes online free There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Do state taxes online free You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Do state taxes online free Note. Do state taxes online free The following rules about reimbursement arrangements also apply to expense allowances received from your employer. Do state taxes online free Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Do state taxes online free Your expenses must have a business connection. Do state taxes online free This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. Do state taxes online free You must adequately account to your employer for your expenses within a reasonable period of time. Do state taxes online free You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. Do state taxes online free If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. Do state taxes online free If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. Do state taxes online free Accountable plan rules not met. Do state taxes online free   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. Do state taxes online free Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). Do state taxes online free Expenses equal reimbursement. Do state taxes online free   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. Do state taxes online free Because your expenses and reimbursements are equal, you do not have a deduction. Do state taxes online free Excess expenses. Do state taxes online free   If your expenses are more than your reimbursement, you can deduct your excess expenses. Do state taxes online free This is discussed later, under Deducting Business Expenses . Do state taxes online free Allocating your reimbursements for meals. Do state taxes online free   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. Do state taxes online free If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Do state taxes online free Make the allocation as follows. Do state taxes online free Divide your meal expenses by your total expenses. Do state taxes online free Multiply your total reimbursement by the result from (1). Do state taxes online free This is the allocated reimbursement for your meal expenses. Do state taxes online free Subtract the amount figured in (2) from your total reimbursement. Do state taxes online free The difference is the allocated reimbursement for your other expenses of qualifying work-related education. Do state taxes online free Example. Do state taxes online free Your employer paid you an expense allowance of $2,000 under an accountable plan. Do state taxes online free The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. Do state taxes online free There was no indication of how much of the reimbursement was for each type of expense. Do state taxes online free Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). Do state taxes online free Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. Do state taxes online free   1. Do state taxes online free $425 meal expenses  $2,500 total expenses = . Do state taxes online free 17   2. Do state taxes online free $2,000 (reimbursement)×. Do state taxes online free 17     =$340 (allocated reimbursement for meal expenses)   3. Do state taxes online free $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). Do state taxes online free After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). Do state taxes online free Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. Do state taxes online free You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. Do state taxes online free This is discussed later under Deducting Business Expenses . Do state taxes online free An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. Do state taxes online free Reimbursements for nondeductible expenses. Do state taxes online free   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. Do state taxes online free You must include them in your income. Do state taxes online free For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. Do state taxes online free   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. Do state taxes online free Deducting Business Expenses Self-employed persons and employees report their business expenses differently. Do state taxes online free The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Do state taxes online free Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). Do state taxes online free If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Do state taxes online free See the instructions for the form you file for information on how to complete it. Do state taxes online free Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Do state taxes online free If either (1) or (2) applies, you can deduct the total qualifying cost. Do state taxes online free If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Do state taxes online free In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Do state taxes online free (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Do state taxes online free ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Do state taxes online free Form 2106 or 2106-EZ. Do state taxes online free   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. Do state taxes online free Form not required. Do state taxes online free   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. Do state taxes online free   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Do state taxes online free (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. Do state taxes online free ) Using Form 2106-EZ. Do state taxes online free   This form is shorter and easier to use than Form 2106. Do state taxes online free Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Do state taxes online free   If you do not meet both of these requirements, use Form 2106. Do state taxes online free Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Do state taxes online free Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. Do state taxes online free You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Do state taxes online free You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . Do state taxes online free For more information on qualified performing artists, see chapter 6 of Publication 463. Do state taxes online free Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Do state taxes online free They are not subject to the 2%-of-adjusted-gross-income limit. Do state taxes online free To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Do state taxes online free For more information on impairment-related work expenses, see chapter 6 of Publication 463. Do state taxes online free Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Do state taxes online free Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Do state taxes online free If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. Do state taxes online free However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. Do state taxes online free Examples of records to keep. Do state taxes online free   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. Do state taxes online free You should keep adequate records or have sufficient evidence that will support your expenses. Do state taxes online free Estimates or approximations do not qualify as proof of an expense. Do state taxes online free Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. Do state taxes online free , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. Do state taxes online free Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. Do state taxes online free Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. Do state taxes online free Complete information about any scholarship or fellowship grants, including amounts you received during the year. Do state taxes online free Illustrated Example Victor Jones teaches math at a private high school in North Carolina. Do state taxes online free He was selected to attend a 3-week math seminar at a university in California. Do state taxes online free The seminar will improve his skills in his current job and is qualifying work-related education. Do state taxes online free He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. Do state taxes online free Victor will file Form 1040. Do state taxes online free His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. Do state taxes online free He shows his expenses for the seminar in Part I of the form. Do state taxes online free He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. Do state taxes online free He enters $400 on line 4 for his tuition and books. Do state taxes online free On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. Do state taxes online free He multiplies that amount by 50% and enters the result, $263, on line 5. Do state taxes online free On line 6, Victor totals the amounts from lines 3 through 5. Do state taxes online free He carries the total, $2,313, to Schedule A (Form 1040), line 21. Do state taxes online free Since he does not claim any vehicle expenses, Victor leaves Part II blank. Do state taxes online free His filled-in form is shown on the next page. Do state taxes online free This image is too large to be displayed in the current screen. Do state taxes online free Please click the link to view the image. Do state taxes online free Form 2106-EZ for V. Do state taxes online free Jones Prev  Up  Next   Home   More Online Publications
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Do state taxes online free Publication 4492-B - Main Content Table of Contents DefinitionsMidwestern Disaster Areas Applicable Disaster Date Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Casualty and Theft LossesTime limit for making election. Do state taxes online free Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesEmployee Retention Credit Employer Housing Credit and Exclusion Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Do state taxes online free Definitions The following definitions are used throughout this publication. Do state taxes online free Midwestern Disaster Areas A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. Do state taxes online free See Tables 1 and 2 for a list of the counties included in the Midwestern disaster areas. Do state taxes online free Applicable Disaster Date The term “applicable disaster date” as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas. Do state taxes online free You will need to know this date when using this publication for the various tax provisions. Do state taxes online free Table 1 The counties listed in Table 1 below are eligible for all tax provisions shown in this publication. Do state taxes online free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 05/02/2008through05/12/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline, and Van Buren. Do state taxes online free 06/01/2008through07/22/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago. Do state taxes online free 05/30/2008through06/27/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne. Do state taxes online free 05/25/2008through08/13/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur, Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama, Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright. Do state taxes online free 05/10/2008through05/11/2008 Missouri Barry, Jasper, and Newton. Do state taxes online free 06/01/2008through08/13/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. Do state taxes online free Charles, Stone, Taney, Vernon, and Webster. Do state taxes online free 05/22/2008through06/24/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster, Platte, Richardson, Sarpy, and Saunders. Do state taxes online free 06/05/2008through07/25/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago. Do state taxes online free *For more details, go to www. Do state taxes online free fema. Do state taxes online free gov Table 2 The counties listed in Table 2 below are eligible for all of the special tax provisions shown in this publication except the following. Do state taxes online free Charitable Giving Incentives. Do state taxes online free Net Operating Losses. Do state taxes online free Education Credits. Do state taxes online free Recapture of Federal Mortgage Subsidy. Do state taxes online free Tax Relief for Temporary Relocation. Do state taxes online free Employee Retention Credit. Do state taxes online free Employer Housing Credit and Exclusion. Do state taxes online free Demolition and Clean-up Costs. Do state taxes online free Increase in Rehabilitation Credit. Do state taxes online free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 06/01/2008through07/22/2008 Illinois Greene, Madison, Monroe, Pike, Randolph, St. Do state taxes online free Clair, and Scott. Do state taxes online free 05/30/2008through06/27/2008 Indiana Benton, Boone, Fountain, Franklin, Jay, Montgomery, Ohio, Switzerland, Union, and Wabash. Do state taxes online free 05/25/2008through08/13/2008 Iowa Carroll, Cherokee, Lyon, Palo Alto, Pocahontas, Taylor, and Wayne. Do state taxes online free 05/22/2008through06/16/2008 Kansas Barber, Barton, Bourbon, Brown, Butler, Chautauqua, Cherokee, Clark, Clay, Comanche, Cowley, Crawford, Decatur, Dickinson, Edwards, Elk, Ellis, Ellsworth, Franklin, Gove, Graham, Harper, Haskell, Hodgeman, Jackson, Jewell, Kingman, Kiowa, Lane, Linn, Logan, Mitchell, Montgomery, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Reno, Republic, Riley, Rooks, Rush, Saline, Seward, Sheridan, Smith, Stafford, Sumner, Thomas, Trego, Wallace, and Wilson. Do state taxes online free 06/06/2008through06/13/2008 Michigan Allegan, Barry, Eaton, Ingham, Lake, Manistee, Mason, Missaukee, Osceola, Ottawa, Saginaw, and Wexford. Do state taxes online free 06/06/2008through06/12/2008 Minnesota Cook, Fillmore, Freeborn, Houston, Mower, and Nobles. Do state taxes online free 06/01/2008through08/13/2008 Missouri Atchison, Audrain, Bates, Buchanan, Cape Girardeau, Carroll, Christian, Daviess, Grundy, Howard, Jefferson, Knox, Mercer, Miller, Mississippi, Morgan, New Madrid, Pemiscot, Perry, Pettis, Platte, Polk, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. Do state taxes online free Genevieve, St. Do state taxes online free Louis, the Independent City of St. Do state taxes online free Louis, Scott, Sullivan, and Worth. Do state taxes online free 04/23/2008through04/26/2008 Nebraska Gage, Johnson, Morrill, Nemaha, and Pawnee. Do state taxes online free 05/22/2008through06/24/2008 Nebraska Adams, Blaine, Boone, Boyd, Brown, Burt, Cass, Chase, Cherry, Cuming, Dundy, Fillmore, Frontier, Furnas, Garfield, Gosper, Greeley, Hall, Hayes, Howard, Johnson, Keya Paha, Lincoln, Logan, Loup, Merrick, McPherson, Morrill, Nance, Nemaha, Otoe, Phelps, Polk, Red Willow, Rock, Saline, Seward, Sherman, Stanton, Thayer, Thomas, Thurston, Valley, Webster, Wheeler, and York. Do state taxes online free 06/27/2008 Nebraska Dodge, Douglas, Sarpy, and Saunders. Do state taxes online free 06/05/2008through07/25/2008 Wisconsin Lafayette. Do state taxes online free * For more details, go to www. Do state taxes online free fema. Do state taxes online free gov Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions This benefit applies only to the counties in Table 1. Do state taxes online free Individuals. Do state taxes online free   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% of adjusted gross income (AGI) limit. Do state taxes online free A qualified contribution is a charitable contribution paid in cash or by check to a 50% limit organization if you make an election to have the 50% limit not apply to these contributions. Do state taxes online free   A qualified contribution must also meet all of the following requirements. Do state taxes online free Be paid after May 1, 2008, and before January 1, 2009. Do state taxes online free The contribution must be for relief efforts in one or more Midwestern disaster areas. Do state taxes online free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Do state taxes online free   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Do state taxes online free You can carry over any contributions you are not able to deduct for 2008 because of this limit. Do state taxes online free In 2009, the carryover of your unused qualified contributions is subject to the 50% of AGI limit. Do state taxes online free Exception. Do state taxes online free   Qualified contributions do not include contributions to certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund. Do state taxes online free Corporations. Do state taxes online free   A corporation can elect to deduct qualified cash contributions without regard to the 10% of taxable income limit if the contributions were paid after May 1, 2008, and before January 1, 2009, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund), for relief efforts in one or more Midwestern disaster areas. Do state taxes online free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Do state taxes online free The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. Do state taxes online free Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% of taxable income limit. Do state taxes online free Partners and shareholders. Do state taxes online free   Each partner in a partnership and each shareholder in an S corporation must make a separate election to have the appropriate limit not apply. Do state taxes online free More information. Do state taxes online free   For more information, see Publication 526 or Publication 542, Corporations. Do state taxes online free Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Do state taxes online free Standard Mileage Rate for Charitable Use of Vehicles This benefit applies only to the counties in Table 1. Do state taxes online free The following are special standard mileage rates in effect for 2008 for the cost of operating your vehicle for providing charitable services related only to the severe storms, tornadoes, or flooding. Do state taxes online free 36 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Do state taxes online free 41 cents per mile for the period July 1 through December 31, 2008. Do state taxes online free Mileage Reimbursements to Charitable Volunteers This benefit applies only to the counties in Table 1. Do state taxes online free You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger vehicle for the benefit of a qualified charitable organization in providing relief related to the severe storms, tornadoes, or flooding during the period beginning on the applicable disaster date, and ending on December 31, 2008. Do state taxes online free You cannot claim a deduction or credit for amounts you exclude. Do state taxes online free You must keep records of miles driven, time, place (or use), and purpose of the mileage. Do state taxes online free The amount you can exclude cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Do state taxes online free 50. Do state taxes online free 5 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Do state taxes online free 58. Do state taxes online free 5 cents per mile for the period July 1 through December 31, 2008. Do state taxes online free Casualty and Theft Losses This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free The following paragraphs explain changes to casualty and theft losses that were caused by the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Do state taxes online free For more information, see Publication 547. Do state taxes online free Limits on personal casualty or theft losses. Do state taxes online free   Losses of personal use property that arose in a Midwestern disaster area on or after the applicable disaster date are not subject to the $100 or 10% of AGI limits. Do state taxes online free Qualifying losses include losses from casualties and thefts that arose in a Midwestern disaster area that were attributable to the severe storms, tornadoes, or flooding. Do state taxes online free When completing Form 4684, do not include on line 17 any losses that arose in a Midwestern disaster area. Do state taxes online free A loss arising in a Midwestern disaster area is not considered a loss attributable to a federally declared disaster for purposes of that line and cannot be added to your standard deduction. Do state taxes online free When to deduct the loss. Do state taxes online free   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. Do state taxes online free However, you can elect to deduct losses caused by the severe storms, tornadoes, or flooding on your return for the prior year. Do state taxes online free Special instructions for individuals who elect to claim a Midwestern disaster area casualty or theft loss for 2007. Do state taxes online free   Individuals filing or amending their 2007 tax return for casualty or theft losses that were attributable to the severe storms, tornadoes, or flooding should: Enter “Midwestern Disaster Area” at the top of Form 1040 or Form 1040X, and Complete the 2008 version of Form 4684. Do state taxes online free Cross out “2008” and enter “2007” at the top of Form 4684. Do state taxes online free Time limit for making election. Do state taxes online free   You must make this election to claim your casualty or theft loss in 2007 by the later of the following dates. Do state taxes online free The due date (without extensions) for filing your 2008 income tax return. Do state taxes online free The due date (with extensions) for filing your 2007 income tax return. Do state taxes online free Example. Do state taxes online free If you are a calendar year individual taxpayer, you have until April 15, 2009, to amend your 2007 tax return to claim a casualty or theft loss that occurred during 2008. Do state taxes online free Replacement Period for Nonrecognition of Gain This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Do state taxes online free Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a federally declared disaster area). Do state taxes online free However, for property that was involuntarily converted on or after the applicable disaster date, as a result of the severe storms, tornadoes, or flooding, a 5-year replacement period applies if substantially all of the use of the replacement property is in a Midwestern disaster area. Do state taxes online free For more information, see the Instructions for Form 4684. Do state taxes online free Net Operating Losses This benefit applies only to the counties in Table 1. Do state taxes online free Qualified disaster recovery assistance loss. Do state taxes online free   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Do state taxes online free However, the portion of an NOL that is a qualified disaster recovery assistance loss can be carried back to the 5 tax years before the NOL year. Do state taxes online free In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Do state taxes online free   A qualified disaster recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified disaster recovery assistance casualty loss (as defined below), Moving expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the employment of an individual whose main home was in a Midwestern disaster area before the applicable disaster date, who was unable to remain in that home because of the severe storms, tornadoes, or flooding, and whose main job location (after the move) is in a Midwestern disaster area, Temporary housing expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, to house employees of the taxpayer whose main job location is in a Midwestern disaster area, Depreciation or amortization allowable for any qualified disaster recovery assistance property (even if you elected not to claim the special disaster recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred on or after the applicable disaster date, and before January 1, 2011, for any damage from the severe storms, tornadoes, or flooding to property located in a Midwestern disaster area. Do state taxes online free Qualified disaster recovery assistance casualty loss. Do state taxes online free   A qualified disaster recovery assistance casualty loss is any deductible section 1231 loss of property located in a Midwestern disaster area if the loss was caused by the severe storms, tornadoes, or flooding. Do state taxes online free For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the severe storms, tornadoes, or flooding of property located in a Midwestern disaster area. Do state taxes online free Any such loss taken into account in figuring your qualified disaster recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. Do state taxes online free More information. Do state taxes online free   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Do state taxes online free IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of the severe storms, tornadoes, or flooding. Do state taxes online free Definitions Qualified disaster recovery assistance distribution. Do state taxes online free   A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan if all of the following apply. Do state taxes online free The distribution was made on or after the applicable disaster date and before January 1, 2010. Do state taxes online free Your main home was located in a Midwestern disaster area on the applicable disaster date. Do state taxes online free You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. Do state taxes online free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Do state taxes online free   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. Do state taxes online free Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. Do state taxes online free   The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. Do state taxes online free If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you can allocate the $100,000 limit among the plans any way you choose. Do state taxes online free   A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution. Do state taxes online free Eligible retirement plan. Do state taxes online free   An eligible retirement plan can be any of the following. Do state taxes online free A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Do state taxes online free A qualified annuity plan. Do state taxes online free A tax-sheltered annuity contract. Do state taxes online free A governmental section 457 deferred compensation plan. Do state taxes online free A traditional, SEP, SIMPLE, or Roth IRA. Do state taxes online free Main home. Do state taxes online free   Generally, your main home is the home where you live most of the time. Do state taxes online free A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Do state taxes online free Taxation of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. Do state taxes online free However, if you elect, you can include the entire distribution in your income in the year it was received. Do state taxes online free Qualified disaster recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Do state taxes online free However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions. Do state taxes online free For more information, see Form 8930. Do state taxes online free Repayment of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Do state taxes online free Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. Do state taxes online free However, see Exceptions later for qualified disaster recovery assistance distributions you cannot repay. Do state taxes online free You have three years from the day after the date you received the distribution to make a repayment. Do state taxes online free Amounts that are repaid are treated as a qualified rollover and are not included in income. Do state taxes online free Also, a repayment of a qualified disaster recovery assistance distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Do state taxes online free See Form 8930 for more information on how to report repayments. Do state taxes online free Exceptions. Do state taxes online free   You cannot repay the following types of distributions. Do state taxes online free Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse). Do state taxes online free Required minimum distributions. Do state taxes online free Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Do state taxes online free Repayment of Qualified Distributions for the Purchase or Construction of a Main Home This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. Do state taxes online free For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Do state taxes online free To be a qualified distribution, the distribution must meet all of the following requirements. Do state taxes online free The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Do state taxes online free The distribution was received after the date that was 6 months before the day after the applicable disaster date. Do state taxes online free The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding. Do state taxes online free Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. Do state taxes online free Also, a repayment of a qualified distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Do state taxes online free A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Do state taxes online free You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009. Do state taxes online free Loans From Qualified Plans This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free The following benefits are available to qualified individuals. Do state taxes online free Increases to the limits for distributions treated as loans from employer plans. Do state taxes online free A 1-year suspension for payments due on plan loans. Do state taxes online free Qualified individual. Do state taxes online free   You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. Do state taxes online free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Do state taxes online free Limits on plan loans. Do state taxes online free   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Do state taxes online free In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Do state taxes online free If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and ending on December 31, 2009. Do state taxes online free One-year suspension of loan payments. Do state taxes online free   Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for 1 year by the plan administrator. Do state taxes online free To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009. Do state taxes online free Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free You can elect to use your 2007 earned income to figure your earned income credit (EIC) and additional child tax credit for 2008 if: Your 2008 earned income is less than your 2007 earned income, and At least one of the following statements is true. Do state taxes online free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 1. Do state taxes online free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2, and you were displaced from that home because of the severe storms, tornadoes, or flooding. Do state taxes online free Earned income. Do state taxes online free    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. Do state taxes online free If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. Do state taxes online free Joint returns. Do state taxes online free   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Do state taxes online free If you make the election, your 2007 earned income is the sum of your 2007 earned income and your spouse's 2007 earned income. Do state taxes online free Making the election. Do state taxes online free   If you make the election to use your 2007 earned income, the election applies for figuring both the EIC and the additional child tax credit. Do state taxes online free However, you can make the election for the additional child tax credit even if you do not take the EIC. Do state taxes online free   Electing to use your 2007 earned income can increase or decrease your EIC. Do state taxes online free Take the following steps to decide whether to make the election. Do state taxes online free Figure your 2008 EIC using your 2007 earned income. Do state taxes online free Figure your 2008 additional child tax credit using your 2007 earned income for EIC purposes. Do state taxes online free Add the results of (1) and (2). Do state taxes online free Figure your 2008 EIC using your 2008 earned income. Do state taxes online free Figure your 2008 additional child tax credit using your 2008 earned income for additional child tax credit purposes. Do state taxes online free Add the results of (4) and (5). Do state taxes online free Compare the results of (3) and (6). Do state taxes online free If (3) is larger than (6), it is to your benefit to make the election. Do state taxes online free If (3) is equal to or smaller than (6), making the election will not help you. Do state taxes online free   If you elect to use your 2007 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2007 earned income on the dotted line next to line 64a of Form 1040, on the line next to line 40a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Do state taxes online free   If you elect to use your 2007 earned income and you are claiming the additional child tax credit, enter your 2007 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. Do state taxes online free Getting your 2007 tax return information. Do state taxes online free   If you do not have your 2007 tax records, you can get the amount of earned income used to figure your 2007 EIC by calling 1-866-562-5227. Do state taxes online free You can also get this information by visiting the IRS website at www. Do state taxes online free irs. Do state taxes online free gov. Do state taxes online free   If you prefer to figure your 2007 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Do state taxes online free See Request for Copy or Transcript of Tax Return on page 11. Do state taxes online free Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free You can claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by the severe storms, tornadoes, or flooding. Do state taxes online free The additional exemption amount is claimed on Form 8914. Do state taxes online free You can claim an additional exemption amount only one time for a specific individual. Do state taxes online free If you claimed an additional exemption amount for an individual in 2008, you cannot claim that amount again for the same individual in 2009. Do state taxes online free The maximum additional exemption amount you can claim for all displaced individuals is $2,000. Do state taxes online free Any additional exemption amount you claimed for displaced individuals in 2008 will reduce the $2,000 maximum for 2009. Do state taxes online free The $2,000 limit applies to a husband and wife, whether the husband and wife file joint returns or separate returns. Do state taxes online free If married filing separately, the $2,000 can be divided in $500 increments between the spouses. Do state taxes online free For example, if one spouse claims an additional exemption amount for one displaced individual, the other spouse, if otherwise eligible, can claim additional exemption amounts for three different displaced individuals. Do state taxes online free If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. Do state taxes online free In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). Do state taxes online free To qualify as a displaced individual, the individual: Must have had his or her main home in a Midwestern disaster area on the applicable disaster date, and he or she must have been displaced from that home. Do state taxes online free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, that home must have been damaged by the severe storms, tornadoes, or flooding or the individual must have been evacuated from that home because of the severe storms, tornadoes, or flooding, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. Do state taxes online free You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Do state taxes online free You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Do state taxes online free Food, clothing, or personal items consumed or used by the displaced individual. Do state taxes online free Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Do state taxes online free Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Do state taxes online free However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. Do state taxes online free Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. Do state taxes online free For more information, see Form 8914. Do state taxes online free Education Credits This benefit applies only to the counties in Table 1. Do state taxes online free The education credits have been expanded for students attending an eligible educational institution located in a Midwestern disaster area (Midwestern disaster area students) for any tax year beginning in 2008 or 2009. Do state taxes online free The Hope credit for a Midwestern disaster area student is increased to 100% of the first $2,400 in qualified education expenses and 50% of the next $2,400 of qualified education expenses for a maximum credit of $3,600 per student. Do state taxes online free The lifetime learning credit rate for a Midwestern disaster area student is increased from 20% to 40%. Do state taxes online free The definition of qualified education expenses for a Midwestern disaster area student also has been expanded. Do state taxes online free This expanded definition also applies to the tuition and fees deduction claimed on Form 8917. Do state taxes online free In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a Midwestern disaster area student include the following. Do state taxes online free Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Do state taxes online free For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Do state taxes online free For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. Do state taxes online free The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Do state taxes online free The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Do state taxes online free You will need to contact the eligible educational institution for qualified room and board costs. Do state taxes online free For more information, see Form 8863. Do state taxes online free See Form 8917 for the tuition and fees deduction. Do state taxes online free Recapture of Federal Mortgage Subsidy This benefit applies only to the counties in Table 1. Do state taxes online free Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Do state taxes online free However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. Do state taxes online free This amount is increased to $150,000 if the loan was provided before 2011 and was used to alter, repair, or improve an existing owner-occupied residence in a Midwestern disaster area as shown in Table 1. Do state taxes online free Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Do state taxes online free Generally, discharges of nonbusiness debts (such as mortgages) made on or after the applicable disaster date and before January 1, 2010, are excluded from income for individuals whose main home was in a Midwestern disaster area on the applicable disaster date. Do state taxes online free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, the individual also must have had an economic loss because of the severe storms, tornadoes, or flooding. Do state taxes online free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Do state taxes online free This relief does not apply to any debt secured by real property located outside a Midwestern disaster area. Do state taxes online free You may also have to reduce certain tax attributes by the amount excluded. Do state taxes online free For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Do state taxes online free Tax Relief for Temporary Relocation This benefit applies only to the counties in Table 1. Do state taxes online free The IRS can adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2008 or 2009 as a result of a temporary relocation caused by the severe storms, tornadoes, or flooding. Do state taxes online free However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. Do state taxes online free The IRS has exercised this authority as follows. Do state taxes online free In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. Do state taxes online free In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. Do state taxes online free You can treat as a student an individual who enrolled in school before the applicable disaster date, and who is unable to attend classes because of the severe storms, tornadoes, or flooding, for each month of the enrollment period that individual is prevented by the severe storms, tornadoes, or flooding from attending school as planned. Do state taxes online free Additional Tax Relief for Businesses Employee Retention Credit This benefit applies only to the counties in Table 1. Do state taxes online free An eligible employer who conducted an active trade or business in a Midwestern disaster area can claim the employee retention credit. Do state taxes online free The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Do state taxes online free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Do state taxes online free Use Form 5884-A to claim the credit. Do state taxes online free Employers affected by the severe storms, tornadoes, or flooding. Do state taxes online free   The following definitions apply to employers affected by the severe storms, tornadoes, or flooding. Do state taxes online free Eligible employer. Do state taxes online free   For this purpose, an eligible employer is any employer who meets all of the following. Do state taxes online free Employed an average of not more than 200 employees on business days during the tax year before the applicable disaster date. Do state taxes online free Conducted an active trade or business on the applicable disaster date in a Midwestern disaster area. Do state taxes online free Whose trade or business was inoperable on any day after the applicable disaster date and before January 1, 2009, because of the damage caused by the severe storms, tornadoes, or flooding. Do state taxes online free Eligible employee. Do state taxes online free   For this purpose, an eligible employee is an employee whose principal place of employment on the applicable disaster date with such eligible employer was in a Midwestern disaster area. Do state taxes online free An employee is not an eligible employee for purposes of the severe storms, tornadoes, or flooding if the employee is treated as an eligible employee for the work opportunity credit. Do state taxes online free Qualified wages. Do state taxes online free   Qualified wages are wages (up to $6,000 per employee) you paid or incurred before January 1, 2009, for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable disaster, and ending on the date your trade or business resumed significant operations at that place. Do state taxes online free In addition, the wages must have been paid or incurred after the applicable disaster date. Do state taxes online free    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Do state taxes online free    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Do state taxes online free Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Do state taxes online free Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Do state taxes online free   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Do state taxes online free For a special rule that applies to railroad employees, see section 51(h)(1)(B). Do state taxes online free   Qualified wages do not include the following. Do state taxes online free Wages paid to your dependent or a related individual. Do state taxes online free See section 51(i)(1). Do state taxes online free Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Do state taxes online free Wages for services of replacement workers during a strike or lockout. Do state taxes online free   For more information, see Form 5884-A. Do state taxes online free Employer Housing Credit and Exclusion This benefit applies only to the counties in Table 1. Do state taxes online free An employer who conducted an active trade or business in a Midwestern disaster area can claim the employer housing credit. Do state taxes online free The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from November 1, 2008, through May 1, 2009. Do state taxes online free The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Do state taxes online free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Do state taxes online free The employer must use Form 5884-A to claim the credit. Do state taxes online free A qualified employee is an individual who had a main home in a Midwestern disaster area on the applicable disaster date, and who performs substantially all employment services in a Midwestern disaster area for the employer furnishing the lodging. Do state taxes online free The employee cannot be your dependent or a related individual. Do state taxes online free See section 51(i)(1). Do state taxes online free For more information, see Form 5884-A. Do state taxes online free Demolition and Clean-up Costs This benefit applies only to the counties in Table 1. Do state taxes online free You can elect to deduct 50% of any qualified disaster recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Do state taxes online free Qualified disaster recovery assistance clean-up costs are any amounts paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the removal of debris from, or the demolition of structures on, real property located in a Midwestern disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Do state taxes online free Qualified disaster recovery assistance clean-up costs are limited to amounts necessary due to damage attributable to the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Do state taxes online free Increase in Rehabilitation Tax Credit This benefit applies only to the counties in Table 1. Do state taxes online free The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred on or after the applicable disaster date, and before January 1, 2012, on buildings located in a Midwestern disaster area as follows. Do state taxes online free For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Do state taxes online free For certified historic structures, the credit percentage is increased from 20% to 26%. Do state taxes online free For more information, see Form 3468, Investment Credit. Do state taxes online free Request for Copy or Transcript of Tax Return Request for copy of tax return. Do state taxes online free   You can use Form 4506 to order a copy of your tax return. Do state taxes online free Generally, there is a $57 fee for requesting each copy of a tax return. Do state taxes online free If your main home, principal place of business, or tax records are located in a Midwestern disaster area, the fee will be waived if “Midwestern Disaster Area” is written in red across the top of the form when filed. Do state taxes online free Request for transcript of tax return. Do state taxes online free   You can use Form 4506-T to order a free transcript of your tax return. Do state taxes online free A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Do state taxes online free You can also call 1-800-829-1040 to order a transcript. Do state taxes online free How To Get Tax Help Special IRS assistance. Do state taxes online free   The IRS is providing special help for those affected by the severe storms, tornadoes, or flooding, as well as survivors and personal representatives of the victims. Do state taxes online free We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by recent federally declared disasters, or who have other tax issues related to the severe storms, tornadoes, or flooding. Do state taxes online free Call 1-866-562-5227 Monday through FridayIn English–7 a. Do state taxes online free m. Do state taxes online free to 10 p. Do state taxes online free m. Do state taxes online free local timeIn Spanish–8 a. Do state taxes online free m. Do state taxes online free to 9:30 p. Do state taxes online free m. Do state taxes online free local time   The IRS website at www. Do state taxes online free irs. Do state taxes online free gov has notices and other tax relief information. Do state taxes online free Check it periodically for any new guidance. Do state taxes online free You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Do state taxes online free By selecting the method that is best for you, you will have quick and easy access to tax help. Do state taxes online free Contacting your Taxpayer Advocate. Do state taxes online free   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Do state taxes online free Here are seven things every taxpayer should know about TAS: TAS is your voice at the IRS. Do state taxes online free Our service is free, confidential, and tailored to meet your needs. Do state taxes online free You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. Do state taxes online free TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. Do state taxes online free This includes businesses as well as individuals. Do state taxes online free TAS employees know the IRS and how to navigate it. Do state taxes online free We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. Do state taxes online free TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. Do state taxes online free You can call your local advocate, whose number is in your phone book, in Pub. Do state taxes online free 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. Do state taxes online free irs. Do state taxes online free gov/advocate. Do state taxes online free You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Do state taxes online free You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. Do state taxes online free taxtoolkit. Do state taxes online free irs. Do state taxes online free gov. Do state taxes online free Low Income Taxpayer Clinics (LITCs). Do state taxes online free   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. Do state taxes online free LITCs are independent from the IRS. Do state taxes online free Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. Do state taxes online free If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. Do state taxes online free For more information, see Publication 4134, Low Income Taxpayer Clinic List. Do state taxes online free This publication is available at www. Do state taxes online free irs. Do state taxes online free gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. Do state taxes online free Free tax services. Do state taxes online free   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Do state taxes online free It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. Do state taxes online free It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. Do state taxes online free   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Do state taxes online free Free help with your return. Do state taxes online free   Free help in preparing your return is available nationwide from IRS-trained volunteers. Do state taxes online free The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Do state taxes online free Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Do state taxes online free To find the nearest VITA or TCE site, call 1-800-829-1040. Do state taxes online free   As part of the TCE program, AARP offers the Tax-Aide counseling program. Do state taxes online free To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website atwww. Do state taxes online free aarp. Do state taxes online free org/money/taxaide. Do state taxes online free   For more information on these programs, go to www. Do state taxes online free irs. Do state taxes online free gov and enter keyword “VITA” in the upper right-hand corner. Do state taxes online free Internet. Do state taxes online free You can access the IRS website at www. Do state taxes online free irs. Do state taxes online free gov 24 hours a day, 7 days a week to: E-file your return. Do state taxes online free Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Do state taxes online free Check the status of your 2009 refund. Do state taxes online free Go to www. Do state taxes online free irs. Do state taxes online free gov and click on Where's My Refund. Do state taxes online free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Do state taxes online free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Do state taxes online free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Do state taxes online free Download forms, instructions, and publications. Do state taxes online free Order IRS products online. Do state taxes online free Research your tax questions online. Do state taxes online free Search publications online by topic or keyword. Do state taxes online free Use the online Internal Revenue Code, Regulations, or other official guidance. Do state taxes online free View Internal Revenue Bulletins (IRBs) published in the last few years. Do state taxes online free Figure your withholding allowances using the withholding calculator online at www. Do state taxes online free irs. Do state taxes online free gov/individuals. Do state taxes online free Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant. Do state taxes online free Sign up to receive local and national tax news by email. Do state taxes online free Get information on starting and operating a small business. Do state taxes online free Phone. Do state taxes online free Many services are available by phone. Do state taxes online free Ordering forms, instructions, and publications. Do state taxes online free Call 1-800-TAX FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Do state taxes online free You should receive your order within 10 days. Do state taxes online free Asking tax questions. Do state taxes online free Call the IRS with your tax questions at 1-800-829-1040. Do state taxes online free Solving problems. Do state taxes online free You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Do state taxes online free An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Do state taxes online free Call your local Taxpayer Assistance Center for an appointment. Do state taxes online free To find the number, go to www. Do state taxes online free irs. Do state taxes online free gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Do state taxes online free TTY/TDD equipment. Do state taxes online free If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Do state taxes online free TeleTax topics. Do state taxes online free Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Do state taxes online free Refund information. Do state taxes online free To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Do state taxes online free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Do state taxes online free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Do state taxes online free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Do state taxes online free Refunds are sent out weekly on Fridays. 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