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Ez Form 1040

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Ez Form 1040

Ez form 1040 33. Ez form 1040   Crédito para Ancianos o Personas Incapacitadas Table of Contents Introduction Useful Items - You may want to see: ¿Reúne los Requisitos del Crédito?Persona que Reúne los Requisitos Límites sobre los Ingresos Cómo Reclamar el CréditoEl Crédito Calculado por el IRS El Crédito Calculado por Usted Mismo Introduction Si reúne los requisitos, tal vez pueda reducir los impuestos que adeuda tomando el crédito para ancianos o personas incapacitadas, el cual se calcula en el Anexo R (Formulario 1040A o Formulario 1040). Ez form 1040 Este capítulo trata lo siguiente: Quién reúne los requisitos para reclamar el crédito para ancianos o personas incapacitadas. Ez form 1040 Cómo reclamar el crédito. Ez form 1040 Tal vez pueda tomar el crédito para ancianos o personas incapacitadas si: Tiene 65 años de edad o más al final del año 2013 o Se jubiló por incapacidad total y permanente y recibe ingresos por incapacidad sujetos a impuestos. Ez form 1040 Useful Items - You may want to see: Publicación 524 Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés 554 Tax Guide for Seniors (Guía tributaria para personas de la tercera edad), en inglés Formulario (e Instrucciones) Anexo R (Formulario 1040A o 1040) Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés ¿Reúne los Requisitos del Crédito? Puede reclamar el crédito para ancianos o personas incapacitadas si le corresponden ambas situaciones: Usted es una persona que reúne los requisitos. Ez form 1040 Sus ingresos no sobrepasan determinados límites. Ez form 1040 Puede utilizar la Figura 33-A y la Tabla 33-1 como guía para ver si tiene derecho al crédito. Ez form 1040 Primero, utilice la Figura 33-A para saber si reúne los requisitos. Ez form 1040 En tal caso, pase a la Tabla 33-1 para asegurarse que sus ingresos no superen los límites correspondientes al crédito. Ez form 1040 Puede reclamar el crédito sólo si presenta el Formulario 1040 o el Formulario 1040A. Ez form 1040 No puede reclamar el crédito si presenta el Formulario 1040EZ. Ez form 1040 Persona que Reúne los Requisitos Usted reúne los requisitos de este crédito si es ciudadano estadounidense o extranjero residente y cualquiera de las siguientes situaciones le corresponden: Tenía 65 años de edad o más al final del año 2013. Ez form 1040 Tenía menos de 65 años de edad al final del año 2013 y se cumplen las tres condiciones siguientes: Se jubiló por incapacidad total y permanente (se explica más adelante). Ez form 1040 Recibió ingresos sujetos a impuestos por incapacidad durante 2013. Ez form 1040 En el día 1 de enero de 2013, no había alcanzado la edad de jubilación obligatoria (se define más adelante bajo Ingresos por incapacidad ). Ez form 1040 65 años de edad. Ez form 1040   Se considera que tiene 65 años el día antes de cumplir los 65 años. Ez form 1040 Por lo tanto, si nació el 1 de enero de 1949, se considera que tiene 65 años de edad al final de 2013. Ez form 1040 Ciudadano o Extranjero Residente de los Estados Unidos Para reclamar el crédito, tiene que ser ciudadano o extranjero residente de los Estados Unidos (o ser tratado como extranjero residente). Ez form 1040 Normalmente, no puede reclamar el crédito si fue extranjero no residente en algún momento durante el año tributario. Ez form 1040 Excepciones. Ez form 1040   Tal vez pueda tomar el crédito si es extranjero no residente casado con un ciudadano o extranjero residente de los EE. Ez form 1040 UU. Ez form 1040 al final del año tributario, y usted y su cónyuge optan por tratarlo a usted como extranjero residente de los Estados Unidos. Ez form 1040 En tal caso, se gravan impuestos sobre los ingresos que usted y su cónyuge reciban de cualquier parte del mundo. Ez form 1040 Si era extranjero no residente al comenzar el año y residente extranjero al final del año, y estaba casado con un ciudadano o extranjero residente de los EE. Ez form 1040 UU. Ez form 1040 al final del año, tal vez pueda optar por ser considerado extranjero residente de los EE. Ez form 1040 UU. Ez form 1040 durante todo el año. Ez form 1040 En ese caso, quizás se le permita reclamar el crédito. Ez form 1040 Para más información sobre estas opciones, vea el capítulo 1 de la Publicación 519, U. Ez form 1040 S. Ez form 1040 Tax Guide for Aliens (Guía tributaria sobre los impuestos estadounidenses para extranjeros), en inglés. Ez form 1040 Personas Casadas Normalmente, si está casado al final del año tributario, usted y su cónyuge tienen que presentar una declaración conjunta para reclamar el crédito. Ez form 1040 No obstante, si usted y su cónyuge no vivieron en la misma vivienda en ningún momento durante el año tributario, pueden presentar una declaración conjunta o declaraciones separadas y aún reclamar el crédito. Ez form 1040 Cabeza de familia. Ez form 1040   Puede presentar la declaración como cabeza de familia y satisfacer las condiciones del crédito, aun si su cónyuge vivió con usted durante los primeros 6 meses del año, si cumple ciertos requisitos. Ez form 1040 Vea Cabeza de Familia en el capítulo 2, para averiguar qué requisitos tiene que cumplir. Ez form 1040 Personas Menores de 65 Años de Edad Si tiene menos de 65 años de edad al final del año 2013, puede reunir los requisitos del crédito sólo si está jubilado por incapacidad total y permanente (se explica a continuación) y ha recibido ingresos por incapacidad sujetos a impuestos (se explica más adelante, bajo el tema Ingresos por incapacidad ). Ez form 1040 Se le considera jubilado por incapacidad total y permanente si: Estaba total y permanentemente incapacitado cuando se jubiló y Se jubiló por incapacidad antes del cierre del año tributario. Ez form 1040 Aunque no se jubile oficialmente, puede que se le considere jubilado por incapacidad cuando haya dejado de trabajar debido a su incapacidad. Ez form 1040 Si se jubiló por incapacidad antes de 1977 y no estaba total y permanentemente incapacitado en ese momento, puede cumplir los requisitos del crédito si estaba total y permanentemente incapacitado el 1 de enero de 1976 o el 1 de enero de 1977. Ez form 1040 Total y permanentemente incapacitado. Ez form 1040    Está total y permanentemente incapacitado si no puede dedicarse a ninguna actividad sustancial remunerada a causa de una condición física o mental. Ez form 1040 Un médico calificado tiene que confirmar por escrito que dicha condición ha durado o puede durar 12 meses o más, o que dicha condición puede culminar en la muerte. Ez form 1040 Vea Declaración del médico , más adelante. Ez form 1040 Actividad sustancial remunerada. Ez form 1040   Se define “actividad sustancial remunerada” como el desempeño de deberes importantes a lo largo de un período de tiempo razonable, mientras uno trabaje para recibir remuneración u obtener ganancias; o un trabajo generalmente realizado a cambio de remuneración o ganancias. Ez form 1040 El mantener un empleo a tiempo completo (o un empleo a tiempo parcial a conveniencia de su empleador) en un ambiente laboral competitivo donde se paga por lo menos el salario mínimo se considera una prueba contundente de que puede dedicarse a una actividad sustancial remunerada. Ez form 1040   Los trabajos realizados para cuidarse a sí mismo o cuidar su vivienda no se consideran actividades sustanciales remuneradas. Ez form 1040 Tampoco se considera actividad sustancial remunerada: el trabajo no remunerado desempeñado en relación con los pasatiempos, la capacitación o terapia institucional, asistencia a una escuela, los clubes, programas sociales y otras actividades semejantes. Ez form 1040 No obstante, realizar este tipo de trabajo puede demostrar que usted es capaz de dedicarse a una actividad sustancial remunerada. Ez form 1040    El hecho de que no haya trabajado por algún tiempo no se considera una prueba concluyente de que no pueda dedicarse a una actividad sustancial remunerada. Ez form 1040 Empleo en establecimientos protegidos. Ez form 1040   Ciertos trabajos ofrecidos a personas con incapacidad física o mental en establecimientos que reúnen ciertos requisitos se consideran empleo protegido. Ez form 1040 Dichos sitios se ubican en establecimientos protegidos, tales como talleres, hospitales e instituciones parecidas, programas laborales o educativos en el hogar y asilos patrocinados por el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés). Ez form 1040   En comparación con el empleo comercial, la remuneración del empleo en establecimientos protegidos es más baja. Ez form 1040 Por lo tanto, una persona no suele buscar empleo en establecimientos protegidos si puede encontrar otro empleo. Ez form 1040 El hecho de que una persona haya aceptado un empleo en establecimientos protegidos no comprueba que la persona pueda dedicarse a una actividad sustancial remunerada. Ez form 1040 Declaración del médico. Ez form 1040   Si tiene menos de 65 años de edad, su médico tiene que certificar por escrito que usted estaba total y permanentemente incapacitado en la fecha en que se jubiló. Ez form 1040 Puede utilizar la declaración en las Instrucciones del Anexo R (Fomulario 1040A o 1040). Ez form 1040    Please click here for the text description of the image. Ez form 1040 Figura 33−A. Ez form 1040 ¿Es Usted una Persona que Reúne los Requisitos? Tabla 33-1. Ez form 1040 Límites sobre los Ingresos SI su estado civil para efectos de la declaración es . Ez form 1040 . Ez form 1040 . Ez form 1040 . Ez form 1040 ENTONCES aun si reúne los requisitos (vea la Figura 33-A ), NO PUEDE reclamar el crédito si . Ez form 1040 . Ez form 1040 . Ez form 1040 . Ez form 1040 Tiene ingresos brutos ajustados (AGI, por sus siglas en inglés)* iguales o superiores a . Ez form 1040 . Ez form 1040 . Ez form 1040 . Ez form 1040 O el total de su Seguro Social no sujeto a impuestos además de otras pensiones, anualidades o ingreso por incapacidad no sujetos a impuestos es igual o superior a . Ez form 1040 . Ez form 1040 . Ez form 1040 . Ez form 1040 soltero, cabeza de familia o viudo que reúne los requisitos con hijo dependiente $17,500 $5,000 casado que presenta una declaración conjunta y sólo uno de los cónyuges reúne los requisitos de la Figura 33-A $20,000 $5,000 casado que presenta una declaración conjunta y ambos cónyuges reúnen los requisitos de la Figura 33-A $25,000 $7,500 casado que presenta una declaración por separado y usted y su cónyuge no vivieron en la misma vivienda en ningún momento del año 2013 $12,500 $3,750 *El AGI es la cantidad indicada en la línea 22 del Formulario 1040A o la línea 38 del Formulario 1040. Ez form 1040   No tiene que presentar esta declaración escrita junto con el Formulario 1040 o Formulario 1040A, pero tiene que guardarla con su documentación. Ez form 1040 Veteranos. Ez form 1040   Si el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés) certifica que está total y permanentemente incapacitado, puede utilizar el Formulario 21-0172 del VA, Certification of Permanent and Total Disability (Certificación de incapacidad total y permanente), en inglés, en lugar de la declaración escrita de un médico que usted está obligado a conservar. Ez form 1040 El Formulario 21-0172 del VA tiene que ser firmado por una persona autorizada por el VA. Ez form 1040 Puede obtener este formulario de la oficina regional del VA de su área. Ez form 1040 Declaración escrita de un médico obtenida en un año anterior. Ez form 1040   Si obtuvo una declaración escrita de su médico en un año anterior y, por su condición continua de incapacidad, no pudo dedicarse a ninguna actividad sustancial remunerada durante 2013, quizás no necesite obtener otra declaración escrita de su médico para 2013. Ez form 1040 Para leer una explicación detallada de las condiciones que tiene que cumplir, consulte la Parte II de las Instrucciones del Anexo R (Formulario 1040A o 1040). Ez form 1040 Si satisface las condiciones obligatorias, marque el recuadro 2 de la Parte II del Anexo R (Formulario 1040A o 1040). Ez form 1040   Si marcó el recuadro 4, 5 ó 6 de la Parte I del Anexo R (Formulario 1040A o 1040), anote en el espacio por encima del recuadro de la línea 2 de la Parte II el (los) primer(os) nombre(s) del (de los) cónyuge(s) para el (los) cual(es) está marcado dicho recuadro. Ez form 1040 Ingresos por incapacidad. Ez form 1040   Si tiene menos de 65 años de edad, tiene que tener también ingresos tributables de compensación por incapacidad para reunir los requisitos del crédito. Ez form 1040 Los ingresos de compensación por incapacidad tienen que cumplir los siguientes requisitos: Se tienen que pagar conforme al seguro de accidente o médico, o el plan de pensiones de su empleador. Ez form 1040 Se tienen que incluir en los ingresos como salario (o pagos en lugar de salario) durante el tiempo por el cual se ausentó del trabajo a raíz de una incapacidad total y permanente. Ez form 1040 Pagos que no se consideran ingresos por incapacidad. Ez form 1040   Todo pago que reciba de un plan que no ofrece una opción para la jubilación por incapacidad no se considera ingreso por incapacidad. Ez form 1040 Todo pago global que reciba por vacaciones acumuladas al jubilarse por incapacidad se considera pago de salario en vez de ingreso por incapacidad. Ez form 1040   Para propósitos del crédito para ancianos o personas incapacitadas, los ingresos por incapacidad no incluyen cantidades que usted reciba después de cumplir la edad obligatoria de jubilación. Ez form 1040 La edad obligatoria de jubilación es la edad establecida por su empleador en la que usted habría estado obligado a jubilarse si no se hubiera quedado incapacitado. Ez form 1040 Límites sobre los Ingresos Para determinar si puede reclamar el crédito, tiene que tener en cuenta dos límites sobre los ingresos. Ez form 1040 El primer límite es la cantidad de ingresos brutos ajustados (AGI, por sus siglas en inglés). Ez form 1040 El segundo límite es la cantidad de Seguro Social no sujeta a impuestos y otras pensiones, anualidades o compensación por incapacidad no sujetas a impuestos que haya recibido. Ez form 1040 Se indican los límites en la Tabla 33-1. Ez form 1040 Si tiene ingresos brutos ajustados y pensiones, anualidades o compensación por incapacidad no sujetos a impuestos inferiores a los límites de ingresos, quizás pueda reclamar el crédito. Ez form 1040 Vea Cómo Reclamar el Crédito , más adelante. Ez form 1040 Si tiene ingresos brutos ajustados o pensiones, anualidades o compensación por incapacidad no sujetos a impuestos iguales o superiores a los límites de ingresos, no puede reclamar el crédito. Ez form 1040 Cómo Reclamar el Crédito Puede calcular el crédito usted mismo o el Servicio de Impuestos Internos (IRS, por sus siglas en inglés) se lo calculará. Ez form 1040 El Crédito Calculado por el IRS Si opta por que el IRS le calcule el crédito, lea el tema presentado a continuación relacionado con el formulario que usted va a presentar (el Formulario 1040 o el Formulario 1040A). Ez form 1040 Si desea que el IRS le calcule su impuesto, vea el capítulo 30 . Ez form 1040 Formulario 1040. Ez form 1040   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040 bajo Impuestos Calculados por el IRS en el capítulo 30. Ez form 1040 Formulario 1040A. Ez form 1040   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040A bajo Impuestos Calculados por el IRS en el capítulo 30. Ez form 1040 El Crédito Calculado por Usted Mismo Si opta por calcular el crédito usted mismo, llene la primera página del Anexo R (Formulario 1040A o 1040). Ez form 1040 Luego, llene la Parte III del Anexo R (Formulario 1040A o 1040). Ez form 1040 Si presenta el Formulario 1040A, anote en la línea 30 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040). Ez form 1040 Si presenta el Formulario 1040, anote en la línea 53 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040), marque el recuadro c y escriba “Sch R” en la línea al lado de dicho recuadro. Ez form 1040 Para leer una explicación detallada sobre cómo llenar la Parte III del Anexo R, vea Figuring the Credit Yourself (Cómo calcular el crédito usted mismo), en la Publicación 524, en inglés. Ez form 1040 Límite del crédito. Ez form 1040   La cantidad del crédito que puede reclamar, por lo general, suele limitarse a la cantidad de impuestos que tiene que pagar. Ez form 1040 Utilice la Credit Limit Worksheet (Hoja de trabajo para calcular el límite del crédito), en las Instrucciones del Anexo R (Formulario 1040A o Formulario 1040) para determinar si su crédito es limitado. Ez form 1040 Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of March 11 Floods in South Dakota

Updated 9/02/11 to include Yankton county.

SD-2011-19, August 24, 2011

ST. PAUL — Victims of flooding that began on March 11, 2011 in parts of South Dakota may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Charles Mix, Hughes, Stanley, Union and Yankton. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after March 11 and on or before June 30 have been postponed to June 30. This includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an individual retirement account (IRA). This also includes the estimated tax payment for the second quarter of 2011 normally due June 15.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after March 11 and on or before March 28, 2011, as long as the deposits were made by March 28, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until June 30 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after March 11 and on or before June 30.

The IRS also gives affected taxpayers until June 30 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due to be performed on or after March 11 and on or before June 30.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after March 11 and on or before March 28 provided the taxpayer made these deposits by March 28.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “South Dakota/Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 20-Mar-2014

The Ez Form 1040

Ez form 1040 8. Ez form 1040   Business Expenses Table of Contents Introduction Useful Items - You may want to see: Bad DebtsAccrual method. Ez form 1040 Cash method. Ez form 1040 Car and Truck ExpensesOffice in the home. Ez form 1040 Methods for Deducting Car and Truck Expenses Reimbursing Your Employees for Expenses Depreciation Employees' PayFringe benefits. Ez form 1040 InsuranceHow to figure the deduction. Ez form 1040 Interest Legal and Professional FeesTax preparation fees. Ez form 1040 Pension Plans Rent Expense Taxes Travel, Meals, and EntertainmentTransportation. Ez form 1040 Taxi, commuter bus, and limousine. Ez form 1040 Baggage and shipping. Ez form 1040 Car or truck. Ez form 1040 Meals and lodging. Ez form 1040 Cleaning. Ez form 1040 Telephone. Ez form 1040 Tips. Ez form 1040 More information. Ez form 1040 Business Use of Your HomeExceptions to exclusive use. Ez form 1040 Other Expenses You Can Deduct Expenses You Cannot Deduct Introduction You can deduct the costs of operating your business. Ez form 1040 These costs are known as business expenses. Ez form 1040 These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year. Ez form 1040 To be deductible, a business expense must be both ordinary and necessary. Ez form 1040 An ordinary expense is one that is common and accepted in your field of business. Ez form 1040 A necessary expense is one that is helpful and appropriate for your business. Ez form 1040 An expense does not have to be indispensable to be considered necessary. Ez form 1040 For more information about the general rules for deducting business expenses, see chapter 1 in Publication 535, Business Expenses. Ez form 1040 If you have an expense that is partly for business and partly personal, separate the personal part from the business part. Ez form 1040 The personal part is not deductible. Ez form 1040 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 946 How To Depreciate Property See chapter 12 for information about getting publications and forms. Ez form 1040 Bad Debts If someone owes you money you cannot collect, you have a bad debt. Ez form 1040 There are two kinds of bad debts, business bad debts and nonbusiness bad debts. Ez form 1040 A business bad debt is generally one that comes from operating your trade or business. Ez form 1040 You may be able to deduct business bad debts as an expense on your business tax return. Ez form 1040 Business bad debt. Ez form 1040   A business bad debt is a loss from the worthlessness of a debt that was either of the following. Ez form 1040 Created or acquired in your business. Ez form 1040 Closely related to your business when it became partly or totally worthless. Ez form 1040 A debt is closely related to your business if your primary motive for incurring the debt is a business reason. Ez form 1040   Business bad debts are mainly the result of credit sales to customers. Ez form 1040 They can also be the result of loans to suppliers, clients, employees, or distributors. Ez form 1040 Goods and services customers have not paid for are shown in your books as either accounts receivable or notes receivable. Ez form 1040 If you are unable to collect any part of these accounts or notes receivable, the uncollectible part is a business bad debt. Ez form 1040    You can take a bad debt deduction for these accounts and notes receivable only if the amount you were owed was included in your gross income either for the year the deduction is claimed or for a prior year. Ez form 1040 Accrual method. Ez form 1040   If you use an accrual method of accounting, you normally report income as you earn it. Ez form 1040 You can take a bad debt deduction for an uncollectible receivable if you have included the uncollectible amount in income. Ez form 1040 Cash method. Ez form 1040   If you use the cash method of accounting, you normally report income when you receive payment. Ez form 1040 You cannot take a bad debt deduction for amounts owed to you that you have not received and cannot collect if you never included those amounts in income. Ez form 1040 More information. Ez form 1040   For more information about business bad debts, see chapter 10 in Publication 535. Ez form 1040 Nonbusiness bad debts. Ez form 1040   All other bad debts are nonbusiness bad debts and are deductible as short-term capital losses on Form 8949 and Schedule D (Form 1040). Ez form 1040 For more information on nonbusiness bad debts, see Publication 550, Investment Income and Expenses. Ez form 1040 Car and Truck Expenses If you use your car or truck in your business, you may be able to deduct the costs of operating and maintaining your vehicle. Ez form 1040 You also may be able to deduct other costs of local transportation and traveling away from home overnight on business. Ez form 1040 You may qualify for a tax credit for qualified plug-in electric vehicles, qualified plug-in electric drive motor vehicles, and alternative motor vehicles you place in service during the year. Ez form 1040 See Form 8936 and Form 8910 for more information. Ez form 1040 Local transportation expenses. Ez form 1040   Local transportation expenses include the ordinary and necessary costs of all the following. Ez form 1040 Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Ez form 1040 Tax home is defined later. Ez form 1040 Visiting clients or customers. Ez form 1040 Going to a business meeting away from your regular workplace. Ez form 1040 Getting from your home to a temporary workplace when you have one or more regular places of work. Ez form 1040 These temporary workplaces can be either within the area of your tax home or outside that area. Ez form 1040 Local business transportation does not include expenses you have while traveling away from home overnight. Ez form 1040 Those expenses are deductible as travel expenses and are discussed later under Travel, Meals, and Entertainment. Ez form 1040 However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. Ez form 1040   Generally, your tax home is your regular place of business, regardless of where you maintain your family home. Ez form 1040 It includes the entire city or general area in which your business or work is located. Ez form 1040 Example. Ez form 1040 You operate a printing business out of rented office space. Ez form 1040 You use your van to deliver completed jobs to your customers. Ez form 1040 You can deduct the cost of round-trip transportation between your customers and your print shop. Ez form 1040    You cannot deduct the costs of driving your car or truck between your home and your main or regular workplace. Ez form 1040 These costs are personal commuting expenses. Ez form 1040 Office in the home. Ez form 1040   Your workplace can be your home if you have an office in your home that qualifies as your principal place of business. Ez form 1040 For more information, see Business Use of Your Home, later. Ez form 1040 Example. Ez form 1040 You are a graphics designer. Ez form 1040 You operate your business out of your home. Ez form 1040 Your home qualifies as your principal place of business. Ez form 1040 You occasionally have to drive to your clients to deliver your completed work. Ez form 1040 You can deduct the cost of the round-trip transportation between your home and your clients. Ez form 1040 Methods for Deducting Car and Truck Expenses For local transportation or overnight travel by car or truck, you generally can use one of the following methods to figure your expenses. Ez form 1040 Standard mileage rate. Ez form 1040 Actual expenses. Ez form 1040 Standard mileage rate. Ez form 1040   You may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Ez form 1040 For 2013, the standard mileage rate is 56. Ez form 1040 5 cents per mile. Ez form 1040    If you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business-related parking fees and tolls. Ez form 1040 Choosing the standard mileage rate. Ez form 1040   If you want to use the standard mileage rate for a car or truck you own, you must choose to use it in the first year the car is available for use in your business. Ez form 1040 In later years, you can choose to use either the standard mileage rate or actual expenses. Ez form 1040   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Ez form 1040 Standard mileage rate not allowed. Ez form 1040   You cannot use the standard mileage rate if you: Operate five or more cars at the same time, Claimed a depreciation deduction using any method other than straight line, for example, ACRS or MACRS, Claimed a section 179 deduction on the car, Claimed the special depreciation allowance on the car, Claimed actual car expenses for a car you leased, or Are a rural mail carrier who received a qualified reimbursement. Ez form 1040 Parking fees and tolls. Ez form 1040   In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. Ez form 1040 (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses. Ez form 1040 ) Actual expenses. Ez form 1040   If you do not choose to use the standard mileage rate, you may be able to deduct your actual car or truck expenses. Ez form 1040    If you qualify to use both methods, figure your deduction both ways to see which gives you a larger deduction. Ez form 1040   Actual car expenses include the costs of the following items. Ez form 1040 Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Ez form 1040 You can divide your expenses based on the miles driven for each purpose. Ez form 1040 Example. Ez form 1040 You are the sole proprietor of a flower shop. Ez form 1040 You drove your van 20,000 miles during the year. Ez form 1040 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use (including commuting miles). Ez form 1040 You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Ez form 1040 More information. Ez form 1040   For more information about the rules for claiming car and truck expenses, see Publication 463. Ez form 1040 Reimbursing Your Employees for Expenses You generally can deduct the amount you reimburse your employees for car and truck expenses. Ez form 1040 The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. Ez form 1040 For details, see chapter 11 in Publication 535. Ez form 1040 That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. Ez form 1040 Depreciation If property you acquire to use in your business is expected to last more than 1 year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Ez form 1040 You must spread the cost over more than 1 tax year and deduct part of it each year on Schedule C. Ez form 1040 This method of deducting the cost of business property is called depreciation. Ez form 1040 The discussion here is brief. Ez form 1040 You will find more information about depreciation in Publication 946. Ez form 1040 What property can be depreciated?   You can depreciate property if it meets all the following requirements. Ez form 1040 It must be property you own. Ez form 1040 It must be used in business or held to produce income. Ez form 1040 You never can depreciate inventory (explained in chapter 2) because it is not held for use in your business. Ez form 1040 It must have a useful life that extends substantially beyond the year it is placed in service. Ez form 1040 It must have a determinable useful life, which means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Ez form 1040 You never can depreciate the cost of land because land does not wear out, become obsolete, or get used up. Ez form 1040 It must not be excepted property. Ez form 1040 This includes property placed in service and disposed of in the same year. Ez form 1040 Repairs. Ez form 1040    You cannot depreciate repairs and replacements that do not increase the value of your property, make it more useful, or lengthen its useful life. Ez form 1040 You can deduct these amounts on line 21 of Schedule C or line 2 of Schedule C-EZ. Ez form 1040 Depreciation method. Ez form 1040   The method for depreciating most business and investment property placed in service after 1986 is called the Modified Accelerated Cost Recovery System (MACRS). Ez form 1040 MACRS is discussed in detail in Publication 946. Ez form 1040 Section 179 deduction. Ez form 1040   You can elect to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Ez form 1040 This deduction is known as the “section 179 deduction. Ez form 1040 ” The maximum amount you can elect to deduct during 2013 is generally $500,000 (higher limits apply to certain property). Ez form 1040 See IRC 179(e). Ez form 1040   This limit is generally reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. Ez form 1040 The total amount of depreciation (including the section 179 deduction) you can take for a passenger automobile you use in your business and first place in service in 2013 is $3,160 ($11,160 if you take the special depreciation allowance for qualified passenger automobiles placed in service in 2013). Ez form 1040 Special rules apply to trucks and vans. Ez form 1040 For more information, see Publication 946. Ez form 1040 It explains what property qualifies for the deduction, what limits apply to the deduction, and when and how to recapture the deduction. Ez form 1040    Your section 179 election for the cost of any sport utility vehicle (SUV) and certain other vehicles is limited to $25,000. Ez form 1040 For more information, see the Instructions for Form 4562 or Publication 946. Ez form 1040 Listed property. Ez form 1040   You must follow special rules and recordkeeping requirements when depreciating listed property. Ez form 1040 Listed property is any of the following. Ez form 1040 Most passenger automobiles. Ez form 1040 Most other property used for transportation. Ez form 1040 Any property of a type generally used for entertainment, recreation, or amusement. Ez form 1040 Certain computers and related peripheral equipment. Ez form 1040   For more information about listed property, see Publication 946. Ez form 1040 Form 4562. Ez form 1040   Use Form 4562, Depreciation and Amortization, if you are claiming any of the following. Ez form 1040 Depreciation on property placed in service during the current tax year. Ez form 1040 A section 179 deduction. Ez form 1040 Depreciation on any listed property (regardless of when it was placed in service). Ez form 1040    If you have to use Form 4562, you must file Schedule C. Ez form 1040 You cannot use Schedule C-EZ. Ez form 1040   Employees' Pay You can generally deduct on Schedule C the pay you give your employees for the services they perform for your business. Ez form 1040 The pay may be in cash, property, or services. Ez form 1040 To be deductible, your employees' pay must be an ordinary and necessary expense and you must pay or incur it in the tax year. Ez form 1040 In addition, the pay must meet both the following tests. Ez form 1040 The pay must be reasonable. Ez form 1040 The pay must be for services performed. Ez form 1040 Chapter 2 in Publication 535 explains and defines these requirements. Ez form 1040 You cannot deduct your own salary or any personal withdrawals you make from your business. Ez form 1040 As a sole proprietor, you are not an employee of the business. Ez form 1040 If you had employees during the year, you must use Schedule C. Ez form 1040 You cannot use Schedule C-EZ. Ez form 1040 Kinds of pay. Ez form 1040   Some of the ways you may provide pay to your employees are listed below. Ez form 1040 For an explanation of each of these items, see chapter 2 in Publication 535. Ez form 1040 Awards. Ez form 1040 Bonuses. Ez form 1040 Education expenses. Ez form 1040 Fringe benefits (discussed later). Ez form 1040 Loans or advances you do not expect the employee to repay if they are for personal services actually performed. Ez form 1040 Property you transfer to an employee as payment for services. Ez form 1040 Reimbursements for employee business expenses. Ez form 1040 Sick pay. Ez form 1040 Vacation pay. Ez form 1040 Fringe benefits. Ez form 1040   A fringe benefit is a form of pay for the performance of services. Ez form 1040 The following are examples of fringe benefits. Ez form 1040 Benefits under qualified employee benefit programs. Ez form 1040 Meals and lodging. Ez form 1040 The use of a car. Ez form 1040 Flights on airplanes. Ez form 1040 Discounts on property or services. Ez form 1040 Memberships in country clubs or other social clubs. Ez form 1040 Tickets to entertainment or sporting events. Ez form 1040   Employee benefit programs include the following. Ez form 1040 Accident and health plans. Ez form 1040 Adoption assistance. Ez form 1040 Cafeteria plans. Ez form 1040 Dependent care assistance. Ez form 1040 Educational assistance. Ez form 1040 Group-term life insurance coverage. Ez form 1040 Welfare benefit funds. Ez form 1040   You can generally deduct the cost of fringe benefits you provide on your Schedule C in whatever category the cost falls. Ez form 1040 For example, if you allow an employee to use a car or other property you lease, deduct the cost of the lease as a rent or lease expense. Ez form 1040 If you own the property, include your deduction for its cost or other basis as a section 179 deduction or a depreciation deduction. Ez form 1040    You may be able to exclude all or part of the fringe benefits you provide from your employees' wages. Ez form 1040 For more information about fringe benefits and the exclusion of benefits, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Ez form 1040 Insurance You can generally deduct premiums you pay for the following kinds of insurance related to your business. Ez form 1040 Fire, theft, flood, or similar insurance. Ez form 1040 Credit insurance that covers losses from business bad debts. Ez form 1040 Group hospitalization and medical insurance for employees, including long-term care insurance. Ez form 1040 Liability insurance. Ez form 1040 Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. Ez form 1040 Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. Ez form 1040 Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. Ez form 1040 Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. Ez form 1040 Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. Ez form 1040 If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. Ez form 1040 If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. Ez form 1040 Life insurance covering your employees if you are not directly or indirectly the beneficiary under the contract. Ez form 1040 Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. Ez form 1040 Nondeductible premiums. Ez form 1040   You cannot deduct premiums on the following kinds of insurance. Ez form 1040 Self-insurance reserve funds. Ez form 1040 You cannot deduct amounts credited to a reserve set up for self-insurance. Ez form 1040 This applies even if you cannot get business insurance coverage for certain business risks. Ez form 1040 However, your actual losses may be deductible. Ez form 1040 For more information, see Publication 547, Casualties, Disasters, and Thefts. Ez form 1040 Loss of earnings. Ez form 1040 You cannot deduct premiums for a policy that pays for your lost earnings due to sickness or disability. Ez form 1040 However, see item (8) in the previous list. Ez form 1040 Certain life insurance and annuities. Ez form 1040 For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. Ez form 1040 You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. Ez form 1040 A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. Ez form 1040 For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. Ez form 1040 The disallowance applies without regard to whom the policy covers. Ez form 1040 Insurance to secure a loan. Ez form 1040 If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. Ez form 1040 Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. Ez form 1040 In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. Ez form 1040 Self-employed health insurance deduction. Ez form 1040   You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for you and your family. Ez form 1040 How to figure the deduction. Ez form 1040   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. Ez form 1040 However, if any of the following apply, you must use the worksheet in chapter 6 of Publication 535. Ez form 1040 You have more than one source of income subject to self-employment tax. Ez form 1040 You file Form 2555 or Form 2555-EZ (relating to foreign earned income). Ez form 1040 You are using amounts paid for qualified long-term care insurance to figure the deduction. Ez form 1040 Prepayment. Ez form 1040   You cannot deduct expenses in advance, even if you pay them in advance. Ez form 1040 This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Ez form 1040 Example. Ez form 1040 In 2013, you signed a 3-year insurance contract. Ez form 1040 Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. Ez form 1040 You can deduct in 2014 and 2015 the premium allocable to those years. Ez form 1040 More information. Ez form 1040   For more information about deducting insurance, see chapter 6 in Publication 535. Ez form 1040 Interest You can generally deduct as a business expense all interest you pay or accrue during the tax year on debts related to your business. Ez form 1040 Interest relates to your business if you use the proceeds of the loan for a business expense. Ez form 1040 It does not matter what type of property secures the loan. Ez form 1040 You can deduct interest on a debt only if you meet all of the following requirements. Ez form 1040 You are legally liable for that debt. Ez form 1040 Both you and the lender intend that the debt be repaid. Ez form 1040 You and the lender have a true debtor-creditor relationship. Ez form 1040 You cannot deduct on Schedule C or C-EZ the interest you paid on personal loans. Ez form 1040 If a loan is part business and part personal, you must divide the interest between the personal part and the business part. Ez form 1040 Example. Ez form 1040 In 2013, you paid $600 interest on a car loan. Ez form 1040 During 2013, you used the car 60% for business and 40% for personal purposes. Ez form 1040 You are claiming actual expenses on the car. Ez form 1040 You can only deduct $360 (60% × $600) for 2013 on Schedule C or C-EZ. Ez form 1040 The remaining interest of $240 is a nondeductible personal expense. Ez form 1040 More information. Ez form 1040   For more information about deducting interest, see chapter 4 in Publication 535. Ez form 1040 That chapter explains the following items. Ez form 1040 Interest you can deduct. Ez form 1040 Interest you cannot deduct. Ez form 1040 How to allocate interest between personal and business use. Ez form 1040 When to deduct interest. Ez form 1040 The rules for a below-market interest rate loan. Ez form 1040 (This is generally a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. Ez form 1040 ) Legal and Professional Fees Legal and professional fees, such as fees charged by accountants, that are ordinary and necessary expenses directly related to operating your business are deductible on Schedule C or C-EZ. Ez form 1040 However, you usually cannot deduct legal fees you pay to acquire business assets. Ez form 1040 Add them to the basis of the property. Ez form 1040 If the fees include payments for work of a personal nature (such as making a will), you can take a business deduction only for the part of the fee related to your business. Ez form 1040 The personal part of legal fees for producing or collecting taxable income, doing or keeping your job, or for tax advice may be deductible on Schedule A (Form 1040) if you itemize deductions. Ez form 1040 For more information, see Publication 529, Miscellaneous Deductions. Ez form 1040 Tax preparation fees. Ez form 1040   You can deduct on Schedule C or C-EZ the cost of preparing that part of your tax return relating to your business as a sole proprietor or statutory employee. Ez form 1040 You can deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. Ez form 1040   You can also deduct on Schedule C or C-EZ the amount you pay or incur in resolving asserted tax deficiencies for your business as a sole proprietor or statutory employee. Ez form 1040 Pension Plans You can set up and maintain the following small business retirement plans for yourself and your employees. Ez form 1040 SEP (Simplified Employee Pension) plans. Ez form 1040 SIMPLE (Savings Incentive Match Plan for Employees) plans. Ez form 1040 Qualified plans (including Keogh or H. Ez form 1040 R. Ez form 1040 10 plans). Ez form 1040 SEP, SIMPLE, and qualified plans offer you and your employees a tax favored way to save for retirement. Ez form 1040 You can deduct contributions you make to the plan for your employees on line 19 of Schedule C. Ez form 1040 If you are a sole proprietor, you can deduct contributions you make to the plan for yourself on line 28 of Form 1040. Ez form 1040 You can also deduct trustees' fees if contributions to the plan do not cover them. Ez form 1040 Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. Ez form 1040 You may also be able to claim a tax credit of 50% of the first $1,000 of qualified startup costs if you begin a new qualified defined benefit or defined contribution plan (including a 401(k) plan), SIMPLE plan, or simplified employee pension. Ez form 1040 Under certain plans, employees can have you contribute limited amounts of their before-tax pay to a plan. Ez form 1040 These amounts (and earnings on them) are generally tax free until your employees receive distributions from the plan. Ez form 1040 For more information on retirement plans for small business, see Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans). Ez form 1040 Publication 590, Individual Retirement Arrangements (IRAs), discusses other tax favored ways to save for retirement. Ez form 1040 Rent Expense Rent is any amount you pay for the use of property you do not own. Ez form 1040 In general, you can deduct rent as a business expense only if the rent is for property you use in your business. Ez form 1040 If you have or will receive equity in or title to the property, you cannot deduct the rent. Ez form 1040 Unreasonable rent. Ez form 1040   You cannot take a rental deduction for unreasonable rents. Ez form 1040 Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Ez form 1040 Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Ez form 1040 Rent is not unreasonable just because it is figured as a percentage of gross receipts. Ez form 1040   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. Ez form 1040 For a list of the other related persons, see section 267 of the Internal Revenue Code. Ez form 1040 Rent on your home. Ez form 1040   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. Ez form 1040 You must meet the requirements for business use of your home. Ez form 1040 For more information, see Business Use of Your Home , later. Ez form 1040 Rent paid in advance. Ez form 1040   Generally, rent paid in your business is deductible in the year paid or accrued. Ez form 1040 If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. Ez form 1040 You can deduct the rest of your payment only over the period to which it applies. Ez form 1040 More information. Ez form 1040   For more information about rent, see chapter 3 in Publication 535. Ez form 1040 Taxes You can deduct on Schedule C or C-EZ various federal, state, local, and foreign taxes directly attributable to your business. Ez form 1040 Income taxes. Ez form 1040   You can deduct on Schedule C or C-EZ a state tax on gross income (as distinguished from net income) directly attributable to your business. Ez form 1040 You can deduct other state and local income taxes on Schedule A (Form 1040) if you itemize your deductions. Ez form 1040 Do not deduct federal income tax. Ez form 1040 Employment taxes. Ez form 1040   You can deduct the social security, Medicare, and federal unemployment (FUTA) taxes you paid out of your own funds as an employer. Ez form 1040 Employment taxes are discussed briefly in chapter 1. Ez form 1040 You can also deduct payments you made as an employer to a state unemployment compensation fund or to a state disability benefit fund. Ez form 1040 Deduct these payments as taxes. Ez form 1040 Self-employment tax. Ez form 1040   You can deduct one-half of your self-employment tax on line 27 of Form 1040. Ez form 1040 Self-employment tax is discussed in chapters 1 and 10. Ez form 1040 Personal property tax. Ez form 1040   You can deduct on Schedule C or C-EZ any tax imposed by a state or local government on personal property used in your business. Ez form 1040   You can also deduct registration fees for the right to use property within a state or local area. Ez form 1040 Example. Ez form 1040 May and Julius Winter drove their car 7,000 business miles out of a total of 10,000 miles. Ez form 1040 They had to pay $25 for their annual state license tags and $20 for their city registration sticker. Ez form 1040 They also paid $235 in city personal property tax on the car, for a total of $280. Ez form 1040 They are claiming their actual car expenses. Ez form 1040 Because they used the car 70% for business, they can deduct 70% of the $280, or $196, as a business expense. Ez form 1040 Real estate taxes. Ez form 1040   You can deduct on Schedule C or C-EZ the real estate taxes you pay on your business property. Ez form 1040 Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. Ez form 1040 The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction. Ez form 1040   For more information about real estate taxes, see chapter 5 in Publication 535. Ez form 1040 That chapter explains special rules for deducting the following items. Ez form 1040 Taxes for local benefits, such as those for sidewalks, streets, water mains, and sewer lines. Ez form 1040 Real estate taxes when you buy or sell property during the year. Ez form 1040 Real estate taxes if you use an accrual method of accounting and choose to accrue real estate tax related to a definite period ratably over that period. Ez form 1040 Sales tax. Ez form 1040   Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. Ez form 1040 If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. Ez form 1040 If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. Ez form 1040 If the property is depreciable, add the sales tax to the basis for depreciation. Ez form 1040 For information on the basis of property, see Publication 551, Basis of Assets. Ez form 1040    Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. Ez form 1040 Do not include these taxes in gross receipts or sales. Ez form 1040 Excise taxes. Ez form 1040   You can deduct on Schedule C or C-EZ all excise taxes that are ordinary and necessary expenses of carrying on your business. Ez form 1040 Excise taxes are discussed briefly in chapter 1. Ez form 1040 Fuel taxes. Ez form 1040   Taxes on gasoline, diesel fuel, and other motor fuels you use in your business are usually included as part of the cost of the fuel. Ez form 1040 Do not deduct these taxes as a separate item. Ez form 1040   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. Ez form 1040 For more information, see Publication 510, Excise Taxes. Ez form 1040 Travel, Meals, and Entertainment This section briefly explains the kinds of travel and entertainment expenses you can deduct on Schedule C or C-EZ. Ez form 1040 Table 8-1. Ez form 1040 When Are Entertainment Expenses Deductible? (Note. Ez form 1040 The following is a summary of the rules for deducting entertainment expenses. Ez form 1040 For more details about these rules, see Publication 463. Ez form 1040 ) General rule You can deduct ordinary and necessary expenses to entertain a client, customer, or employee if the expenses meet the directly-related test or the associated test. Ez form 1040 Definitions Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation, and includes meals provided to a customer or client. Ez form 1040 An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Ez form 1040 A necessary expense is one that is helpful and appropriate, although not necessarily required, for your business. Ez form 1040 Tests to be met Directly-related test Entertainment took place in a clear business setting, or Main purpose of entertainment was the active conduct of business, and You did engage in business with the person during the entertainment period, and You had more than a general expectation of getting income or some other specific business benefit. Ez form 1040   Associated test Entertainment is associated with your trade or business, and Entertainment directly precedes or follows a substantial business discussion. Ez form 1040 Other rules You cannot deduct the cost of your meal as an entertainment expense if you are claiming the meal as a travel expense. Ez form 1040 You cannot deduct expenses that are lavish or extravagant under the circumstances. Ez form 1040 You generally can deduct only 50% of your unreimbursed entertainment expenses. Ez form 1040 Travel expenses. Ez form 1040   These are the ordinary and necessary expenses of traveling away from home for your business. Ez form 1040 You are traveling away from home if both the following conditions are met. Ez form 1040 Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work. Ez form 1040 You need to get sleep or rest to meet the demands of your work while away from home. Ez form 1040 Generally, your tax home is your regular place of business, regardless of where you maintain your family home. Ez form 1040 It includes the entire city or general area in which your business is located. Ez form 1040 See Publication 463 for more information. Ez form 1040   The following is a brief discussion of the expenses you can deduct. Ez form 1040 Transportation. Ez form 1040   You can deduct the cost of travel by airplane, train, bus, or car between your home and your business destination. Ez form 1040 Taxi, commuter bus, and limousine. Ez form 1040   You can deduct fares for these and other types of transportation between the airport or station and your hotel, or between the hotel and your work location away from home. Ez form 1040 Baggage and shipping. Ez form 1040   You can deduct the cost of sending baggage and sample or display material between your regular and temporary work locations. Ez form 1040 Car or truck. Ez form 1040   You can deduct the costs of operating and maintaining your vehicle when traveling away from home on business. Ez form 1040 You can deduct actual expenses or the standard mileage rate (discussed earlier under Car and Truck Expenses), as well as business-related tolls and parking. Ez form 1040 If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Ez form 1040 Meals and lodging. Ez form 1040   You can deduct the cost of meals and lodging if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Ez form 1040 In most cases, you can deduct only 50% of your meal expenses. Ez form 1040 Cleaning. Ez form 1040   You can deduct the costs of dry cleaning and laundry while on your business trip. Ez form 1040 Telephone. Ez form 1040   You can deduct the cost of business calls while on your business trip, including business communication by fax machine or other communication devices. Ez form 1040 Tips. Ez form 1040   You can deduct the tips you pay for any expense in this list. Ez form 1040 More information. Ez form 1040   For more information about travel expenses, see Publication 463. Ez form 1040 Entertainment expenses. Ez form 1040   You may be able to deduct business-related entertainment expenses for entertaining a client, customer, or employee. Ez form 1040 In most cases, you can deduct only 50% of these expenses. Ez form 1040   The following are examples of entertainment expenses. Ez form 1040 Entertaining guests at nightclubs, athletic clubs, theaters, or sporting events. Ez form 1040 Providing meals, a hotel suite, or a car to business customers or their families. Ez form 1040 To be deductible, the expenses must meet the rules listed in Table 8-1. Ez form 1040 For details about these rules, see Publication 463. Ez form 1040 Reimbursing your employees for expenses. Ez form 1040   You generally can deduct the amount you reimburse your employees for travel and entertainment expenses. Ez form 1040 The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. Ez form 1040 For details, see chapter 11 in Publication 535. Ez form 1040 That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. Ez form 1040 Business Use of Your Home To deduct expenses related to the part of your home used for business, you must meet specific requirements. Ez form 1040 Even then, your deduction may be limited. Ez form 1040 To qualify to claim expenses for business use of your home, you must meet the following tests. Ez form 1040 Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use , later), Regular, For your business, and The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your business, or A separate structure (not attached to your home) you use in connection with your business. Ez form 1040 Exclusive use. Ez form 1040   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Ez form 1040 The area used for business can be a room or other separately identifiable space. Ez form 1040 The space does not need to be marked off by a permanent partition. Ez form 1040   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Ez form 1040 Example. Ez form 1040 You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. Ez form 1040 Your family also uses the den for recreation. Ez form 1040 The den is not used exclusively in your profession, so you cannot claim a business deduction for its use. Ez form 1040 Exceptions to exclusive use. Ez form 1040   You do not have to meet the exclusive use test if you use part of your home in either of the following ways. Ez form 1040 For the storage of inventory or product samples. Ez form 1040 As a daycare facility. Ez form 1040 For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Ez form 1040 Regular use. Ez form 1040   To qualify under the regular use test, you must use a specific area of your home for business on a continuing basis. Ez form 1040 You do not meet the test if your business use of the area is only occasional or incidental, even if you do not use that area for any other purpose. Ez form 1040 Principal place of business. Ez form 1040   You can have more than one business location, including your home, for a single trade or business. Ez form 1040 To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that business. Ez form 1040 To determine your principal place of business, you must consider all the facts and circumstances. Ez form 1040   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Ez form 1040 You use it exclusively and regularly for administrative or management activities of your business. Ez form 1040 You have no other fixed location where you conduct substantial administrative or management activities of your business. Ez form 1040   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Ez form 1040 The relative importance of the activities performed at each location. Ez form 1040 If the relative importance factor does not determine your principal place of business, you can also consider the time spent at each location. Ez form 1040   If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Ez form 1040 However, for other ways to qualify to deduct home office expenses, see Publication 587. Ez form 1040 Deduction limit. Ez form 1040   If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. Ez form 1040 If your gross income from the business use is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. Ez form 1040   Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation (with depreciation taken last), allocable to the business is limited to the gross income from the business use of your home minus the sum of the following. Ez form 1040 The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). Ez form 1040 The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. Ez form 1040 Do not include in (2) above your deduction for one-half of your self-employment tax. Ez form 1040   Use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Ez form 1040 New simplified method. Ez form 1040    The IRS now provides a simplified method to determine your expenses for business use of your home. Ez form 1040 The simplified method is an alternative to calculating and substantiating actual expenses. Ez form 1040 In most cases, you will figure your deduction by multiplying $5 by the area of your home used for a qualified business use. Ez form 1040 The area you use to figure your deduction is limited to 300 square feet. Ez form 1040 For more information, see the Instructions for Schedule C. Ez form 1040 More information. Ez form 1040   For more information on deducting expenses for the business use of your home, see Publication 587. Ez form 1040 Other Expenses You Can Deduct You may also be able to deduct the following expenses. Ez form 1040 See Publication 535 to find out whether you can deduct them. Ez form 1040 Advertising. Ez form 1040 Bank fees. Ez form 1040 Donations to business organizations. Ez form 1040 Education expenses. Ez form 1040 Energy efficient commercial buildings deduction expenses. Ez form 1040 Impairment-related expenses. Ez form 1040 Interview expense allowances. Ez form 1040 Licenses and regulatory fees. Ez form 1040 Moving machinery. Ez form 1040 Outplacement services. Ez form 1040 Penalties and fines you pay for late performance or nonperformance of a contract. Ez form 1040 Repairs that keep your property in a normal efficient operating condition. Ez form 1040 Repayments of income. Ez form 1040 Subscriptions to trade or professional publications. Ez form 1040 Supplies and materials. Ez form 1040 Utilities. Ez form 1040 Expenses You Cannot Deduct You usually cannot deduct the following as business expenses. Ez form 1040 For more information, see Publication 535. Ez form 1040 Bribes and kickbacks. Ez form 1040 Charitable contributions. Ez form 1040 Demolition expenses or losses. Ez form 1040 Dues to business, social, athletic, luncheon, sporting, airline, and hotel clubs. Ez form 1040 Lobbying expenses. Ez form 1040 Penalties and fines you pay to a governmental agency or instrumentality because you broke the law. Ez form 1040 Personal, living, and family expenses. Ez form 1040 Political contributions. Ez form 1040 Repairs that add to the value of your property or significantly increase its life. Ez form 1040 Prev  Up  Next   Home   More Online Publications