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Federal Amended Tax Return

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Federal Amended Tax Return

Federal amended tax return Publication 536 - Main Content Table of Contents NOL Steps How To Figure an NOLNonbusiness deductions (line 6). Federal amended tax return Nonbusiness income (line 7). Federal amended tax return Nonbusiness capital losses. Federal amended tax return Business capital losses. Federal amended tax return Illustrated Form 1045, Schedule A When To Use an NOLExceptions to 2-Year Carryback Rule Waiving the Carryback Period How To Carry an NOL Back or Forward How To Claim an NOL DeductionDeducting a Carryback Deducting a Carryforward Change in Marital Status Change in Filing Status Illustrated Form 1045 How To Figure an NOL CarryoverIllustrated Form 1045, Schedule B NOL Carryover From 2013 to 2014Worksheet Instructions How To Get Tax HelpLow Income Taxpayer Clinics NOL Steps Follow Steps 1 through 5 to figure and use your NOL. Federal amended tax return Step 1. Federal amended tax return   Complete your tax return for the year. Federal amended tax return You may have an NOL if a negative figure appears on the line below: Individuals — Form 1040, line 41, or Form 1040NR, line 39. Federal amended tax return Estates and trusts — Form 1041, line 22. Federal amended tax return   If the amount on that line is not negative, stop here — you do not have an NOL. Federal amended tax return Step 2. Federal amended tax return   Determine whether you have an NOL and its amount. Federal amended tax return See How To Figure an NOL , later. Federal amended tax return If you do not have an NOL, stop here. Federal amended tax return Step 3. Federal amended tax return   Decide whether to carry the NOL back to a past year or to waive the carryback period and instead carry the NOL forward to a future year. Federal amended tax return See When To Use an NOL , later. Federal amended tax return Step 4. Federal amended tax return   Deduct the NOL in the carryback or carryforward year. Federal amended tax return See How To Claim an NOL Deduction , later. Federal amended tax return If your NOL deduction is equal to or less than your taxable income without the deduction, stop here — you have used up your NOL. Federal amended tax return Step 5. Federal amended tax return   Determine the amount of your unused NOL. Federal amended tax return See How To Figure an NOL Carryover , later. Federal amended tax return Carry over the unused NOL to the next carryback or carryforward year and begin again at Step 4. Federal amended tax return Note. Federal amended tax return   If your NOL deduction includes more than one NOL amount, apply Step 5 separately to each NOL amount, starting with the amount from the earliest year. Federal amended tax return How To Figure an NOL If your deductions for the year are more than your income for the year, you may have an NOL. Federal amended tax return There are rules that limit what you can deduct when figuring an NOL. Federal amended tax return In general, the following items are not allowed when figuring an NOL. Federal amended tax return Any deduction for personal exemptions. Federal amended tax return Capital losses in excess of capital gains. Federal amended tax return The section 1202 exclusion of the gain from the sale or exchange of qualified small business stock. Federal amended tax return Nonbusiness deductions in excess of nonbusiness income. Federal amended tax return The net operating loss deduction. Federal amended tax return The domestic production activities deduction. Federal amended tax return Form 1045, Schedule A. Federal amended tax return   Use Form 1045, Schedule A, to figure an NOL. Federal amended tax return The following discussion explains Schedule A and includes an illustrated example. Federal amended tax return   First, complete Form 1045, Schedule A, line 1, using amounts from your return. Federal amended tax return If line 1 is a negative amount, you may have an NOL. Federal amended tax return   Next, complete the rest of Form 1045, Schedule A, to figure your NOL. Federal amended tax return Nonbusiness deductions (line 6). Federal amended tax return   Enter on line 6 deductions that are not connected to your trade or business or your employment. Federal amended tax return Examples of deductions not related to your trade or business are: Alimony paid, Deductions for contributions to an IRA or a self-employed retirement plan, Health savings account deduction, Archer medical savings account deduction, Most itemized deductions (except for casualty and theft losses, state income tax on trade and business income, and any employee business expenses), and The standard deduction. Federal amended tax return   Do not include on line 6 the deduction for personal exemptions for you, your spouse, or your dependents. Federal amended tax return   Do not enter business deductions on line 6. Federal amended tax return These are deductions that are connected to your trade or business. Federal amended tax return They include the following. Federal amended tax return State income tax on income attributable to trade or business (including wages, salary, and unemployment compensation). Federal amended tax return Moving expenses. Federal amended tax return Educator expenses. Federal amended tax return The deduction for the deductible part of self-employed health insurance. Federal amended tax return Domestic production activities deduction. Federal amended tax return Rental losses. Federal amended tax return Loss on the sale or exchange of business real estate or depreciable property. Federal amended tax return Your share of a business loss from a partnership or an S corporation. Federal amended tax return Ordinary loss on the sale or exchange of stock in a small business corporation or a small business investment company. Federal amended tax return If you itemize your deductions, casualty and theft losses (even if they involve nonbusiness property) and employee business expenses (such as union dues, uniforms, tools, education expenses, and travel and transportation expenses). Federal amended tax return Loss on the sale of accounts receivable (if you use an accrual method of accounting). Federal amended tax return Interest and litigation expenses on state and federal income taxes related to your business. Federal amended tax return Unrecovered investment in a pension or annuity claimed on a decedent's final return. Federal amended tax return Payment by a federal employee to buy back sick leave used in an earlier year. Federal amended tax return Nonbusiness income (line 7). Federal amended tax return   Enter on line 7 only income that is not related to your trade or business or your employment. Federal amended tax return For example, enter your annuity income, dividends, and interest on investments. Federal amended tax return Also, include your share of nonbusiness income from partnerships and S corporations. Federal amended tax return   Do not include on line 7 the income you receive from your trade or business or your employment. Federal amended tax return This includes salaries and wages, self-employment income, unemployment compensation included in your gross income, and your share of business income from partnerships and S corporations. Federal amended tax return Also, do not include rental income or ordinary gain from the sale or other disposition of business real estate or depreciable business property. Federal amended tax return Adjustment for section 1202 exclusion (line 17). Federal amended tax return   Enter on line 17 any gain you excluded under section 1202 on the sale or exchange of qualified small business stock. Federal amended tax return Adjustments for capital losses (lines 19–22). Federal amended tax return   The amount deductible for capital losses is limited based on whether the losses are business capital losses or nonbusiness capital losses. Federal amended tax return Nonbusiness capital losses. Federal amended tax return   You can deduct your nonbusiness capital losses (line 2) only up to the amount of your nonbusiness capital gains without regard to any section 1202 exclusion (line 3). Federal amended tax return If your nonbusiness capital losses are more than your nonbusiness capital gains without regard to any section 1202 exclusion, you cannot deduct the excess. Federal amended tax return Business capital losses. Federal amended tax return   You can deduct your business capital losses (line 11) only up to the total of: Your nonbusiness capital gains that are more than the total of your nonbusiness capital losses and excess nonbusiness deductions (line 10), and Your total business capital gains without regard to any section 1202 exclusion (line 12). Federal amended tax return Domestic production activities deduction (line 23). Federal amended tax return   You cannot take the domestic production activities deduction when figuring your NOL. Federal amended tax return Enter on line 23 any domestic production activities deduction claimed on your return. Federal amended tax return NOLs from other years (line 24). Federal amended tax return   You cannot deduct any NOL carryovers or carrybacks from other years. Federal amended tax return Enter the total amount of your NOL deduction for losses from other years. Federal amended tax return Illustrated Form 1045, Schedule A The following example illustrates how to figure an NOL. Federal amended tax return It includes filled-in pages 1 and 2 of Form 1040 and Form 1045, Schedule A. Federal amended tax return Example. Federal amended tax return Glenn Johnson is in the retail record business. Federal amended tax return He is single and has the following income and deductions on his Form 1040 for 2013. Federal amended tax return See the illustrated Form 1040 , later. Federal amended tax return INCOME   Wages from part-time job $1,225 Interest on savings 425 Net long-term capital gain on sale of real estate used in business 2,000 Glenn's total income $3,650 DEDUCTIONS   Net loss from business (gross income of $67,000 minus expenses of $72,000) $5,000 Net short-term capital loss on sale of stock 1,000 Standard deduction 6,100 Personal exemption 3,900 Glenn's total deductions $16,000 Glenn's deductions exceed his income by $12,350 ($16,000 − $3,650). Federal amended tax return However, to figure whether he has an NOL, certain deductions are not allowed. Federal amended tax return He uses Form 1045, Schedule A, to figure his NOL. Federal amended tax return See the Illustrated Form 1045, Schedule A , later. Federal amended tax return The following items are not allowed on Form 1045, Schedule A. Federal amended tax return Nonbusiness net short-term capital loss $1,000 Nonbusiness deductions (standard deduction, $6,100) minus nonbusiness income (interest, $425) 5,675 Deduction for personal exemption 3,900 Total adjustments to net loss $10,575     Therefore, Glenn's NOL for 2013 is figured as follows: Glenn's total 2013 income $3,650 Less:     Glenn's original 2013 total deductions $16,000   Reduced by the disallowed items − 10,575 − 5,425 Glenn's NOL for 2013 $1,775 This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1040, page 1 This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1040, page 2 This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1045, page 2 When To Use an NOL Generally, if you have an NOL for a tax year ending in 2013, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period). Federal amended tax return You can, however, choose not to carry back an NOL and only carry it forward. Federal amended tax return See Waiving the Carryback Period , later. Federal amended tax return You cannot deduct any part of the NOL remaining after the 20-year carryforward period. Federal amended tax return NOL year. Federal amended tax return   This is the year in which the NOL occurred. Federal amended tax return Exceptions to 2-Year Carryback Rule Eligible losses, farming losses, qualified disaster losses, and specified liability losses, all defined next, qualify for longer carryback periods. Federal amended tax return Eligible loss. Federal amended tax return   The carryback period for eligible losses is 3 years. Federal amended tax return Only the eligible loss portion of the NOL can be carried back 3 years. Federal amended tax return An eligible loss is any part of an NOL that: Is from a casualty or theft, or Is attributable to a federally declared disaster for a qualified small business or certain qualified farming businesses. Federal amended tax return Qualified small business. Federal amended tax return   A qualified small business is a sole proprietorship or a partnership that has average annual gross receipts (reduced by returns and allowances) of $5 million or less during the 3-year period ending with the tax year of the NOL. Federal amended tax return If the business did not exist for this entire 3-year period, use the period the business was in existence. Federal amended tax return   An eligible loss does not include a farming loss or a qualified disaster loss. Federal amended tax return Farming loss. Federal amended tax return   The carryback period for a farming loss is 5 years. Federal amended tax return Only the farming loss portion of the NOL can be carried back 5 years. Federal amended tax return A farming loss is the smaller of: The amount that would be the NOL for the tax year if only income and deductions attributable to farming businesses were taken into account, or The NOL for the tax year. Federal amended tax return Farming business. Federal amended tax return   A farming business is a trade or business involving cultivation of land or the raising or harvesting of any agricultural or horticultural commodity. Federal amended tax return A farming business can include operating a nursery or sod farm or raising or harvesting most ornamental trees or trees bearing fruit, nuts, or other crops. Federal amended tax return The raising, shearing, feeding, caring for, training, and management of animals is also considered a farming business. Federal amended tax return   A farming business does not include contract harvesting of an agricultural or horticultural commodity grown or raised by someone else. Federal amended tax return It also does not include a business in which you merely buy or sell plants or animals grown or raised entirely by someone else. Federal amended tax return Waiving the 5-year carryback. Federal amended tax return   You can choose to figure the carryback period for a farming loss without regard to the special 5-year carryback rule. Federal amended tax return To make this choice for 2013, attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 farming losses without regard to the special 5-year carryback rule. Federal amended tax return If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Federal amended tax return Attach an election statement to your amended return, and write “Filed pursuant to section 301. Federal amended tax return 9100-2” at the top of the statement. Federal amended tax return Once made, this choice is irrevocable. Federal amended tax return Qualified disaster loss. Federal amended tax return   The carryback period for a qualified disaster loss is 5 years. Federal amended tax return Only the qualified disaster loss portion of the NOL can be carried back 5 years. Federal amended tax return A qualified disaster loss is the smaller of: The sum of: Any losses attributable to a federally declared disaster and occurring before January 1, 2010, in the disaster area, plus Any allowable qualified disaster expenses (even if you did not choose to treat those expenses as deductions in the current year), or The NOL for the tax year. Federal amended tax return Qualified disaster expenses. Federal amended tax return   A qualified disaster expense is any capital expense paid or incurred in connection with a trade or business or with business-related property which is: For the abatement or control of hazardous substances that were released as a result of a federally declared disaster occurring before January 1, 2010, For the removal of debris from, or the demolition of structures on, real property which is business-related property damaged or destroyed as a result of a federally declared disaster occurring before January 1, 2010, or For the repair of business-related property damaged as a result of a federally declared disaster occurring before January 1, 2010. Federal amended tax return Business-related property is property held for use in a trade or business, property held for the production of income, or inventory property. Federal amended tax return Note. Federal amended tax return Section 198A allows taxpayers to treat certain capital expenses (qualified disaster expenses) as deductions in the year the expenses were paid or incurred. Federal amended tax return Excluded losses. Federal amended tax return   A qualified disaster loss does not include any losses from property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store for which the principal business is the sale of alcoholic beverages for consumption off premises. Federal amended tax return   A qualified disaster loss also does not include any losses from any gambling or animal racing property. Federal amended tax return Gambling or animal racing property is any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and the portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Federal amended tax return Specified liability loss. Federal amended tax return   The carryback period for a specified liability loss is 10 years. Federal amended tax return Only the specified liability loss portion of the NOL can be carried back 10 years. Federal amended tax return Generally, a specified liability loss is a loss arising from: Product liability and expenses incurred in the investigation or settlement of, or opposition to, product liability claims, or An act (or failure to act) that occurred at least 3 years before the beginning of the loss year and resulted in a liability under a federal or state law requiring: Reclamation of land, Dismantling of a drilling platform, Remediation of environmental contamination, or Payment under any workers compensation act. Federal amended tax return   Any loss from a liability arising from (1) through (4) above can be taken into account as a specified liability loss only if you used an accrual method of accounting throughout the period in which the act (or failure to act) occurred. Federal amended tax return For details, see section 172(f). Federal amended tax return Waiving the 10-year carryback. Federal amended tax return   You can choose to figure the carryback period for a specified liability loss without regard to the special 10-year carryback rule. Federal amended tax return To make this choice for 2013 attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 specified liability losses without regard to the special 10-year carryback rule. Federal amended tax return If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Federal amended tax return Attach a statement to your amended return and write “Filed pursuant to section 301. Federal amended tax return 9100-2” at the top of the statement. Federal amended tax return Once made, this choice is irrevocable. Federal amended tax return Waiving the Carryback Period You can choose not to carry back your NOL. Federal amended tax return If you make this choice, then you can use your NOL only in the 20-year carryforward period. Federal amended tax return (This choice means you also choose not to carry back any alternative tax NOL. Federal amended tax return ) To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. Federal amended tax return This statement must show that you are choosing to waive the carryback period under section 172(b)(3). Federal amended tax return If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months of the due date of the return (excluding extensions). Federal amended tax return Attach a statement to your amended return, and write “Filed pursuant to section 301. Federal amended tax return 9100-2” at the top of the statement. Federal amended tax return Once you choose to waive the carryback period, it generally is irrevocable. Federal amended tax return If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year. Federal amended tax return If you do not file this statement on time, you cannot waive the carryback period. Federal amended tax return How To Carry an NOL Back or Forward If you choose to carry back the NOL, you must first carry the entire NOL to the earliest carryback year. Federal amended tax return If your NOL is not used up, you can carry the rest to the next earliest carryback year, and so on. Federal amended tax return If you waive the carryback period or do not use up the NOL in the carryback period, carry forward what remains of the NOL to the 20 tax years following the NOL year. Federal amended tax return Start by carrying it to the first tax year after the NOL year. Federal amended tax return If you do not use it up, carry the unused part to the next year. Federal amended tax return Continue to carry any unused part of the NOL forward until the NOL is used up or you complete the 20-year carryforward period. Federal amended tax return Example 1. Federal amended tax return You started your business as a sole proprietor in 2013 and had a $42,000 NOL for the year. Federal amended tax return No part of the NOL qualifies for the 3-year, 5-year, or 10-year carryback. Federal amended tax return You begin using your NOL in 2011, the second year before the NOL year, as shown in the following chart. Federal amended tax return Year   Carryback/  Carryover Unused  Loss 2011 $42,000 $40,000 2012 40,000 37,000 2013 (NOL year)     2014 37,000 31,500 2015 31,500 22,500 2016 22,500 12,700 2017 12,700 4,000 2018 4,000 -0- If your loss were larger, you could carry it forward until the year 2033. Federal amended tax return If you still had an unused 2013 carryforward after the year 2033, you would not be allowed to deduct it. Federal amended tax return Example 2. Federal amended tax return Assume the same facts as in Example 1 , except that $4,000 of the NOL is attributable to a casualty loss and this loss qualifies for a 3-year carryback period. Federal amended tax return You begin using the $4,000 in 2010. Federal amended tax return As shown in the following chart, $3,000 of this NOL is used in 2010. Federal amended tax return The remaining $1,000 is carried to 2011 with the $38,000 NOL that you must begin using in 2011. Federal amended tax return Year   Carryback/  Carryover Unused  Loss 2010 $4,000 $1,000 2011 39,000 37,000 2012 37,000 34,000 2013 (NOL year)     2014 34,000 28,500 2015 28,500 19,500 2016 19,500 9,700 2017 9,700 1,000 2018 1,000 -0- How To Claim an NOL Deduction If you have not already carried the NOL to an earlier year, your NOL deduction is the total NOL. Federal amended tax return If you carried the NOL to an earlier year, your NOL deduction is the carried over NOL minus the NOL amount you used in the earlier year or years. Federal amended tax return If you carry more than one NOL to the same year, your NOL deduction is the total of these carrybacks and carryovers. Federal amended tax return NOL resulting in no taxable income. Federal amended tax return   If your NOL is more than the taxable income of the year you carry it to (figured before deducting the NOL), you generally will have an NOL carryover to the next year. Federal amended tax return See How To Figure an NOL Carryover , later, to determine how much NOL you have used and how much you carry to the next year. Federal amended tax return Deducting a Carryback If you carry back your NOL, you can use either Form 1045 or Form 1040X. Federal amended tax return You can get your refund faster by using Form 1045, but you have a shorter time to file it. Federal amended tax return You can use Form 1045 to apply an NOL to all carryback years. Federal amended tax return If you use Form 1040X, you must use a separate Form 1040X for each carryback year to which you apply the NOL. Federal amended tax return Estates and trusts that do not file Form 1045 must file an amended Form 1041 (instead of Form 1040X) for each carryback year to which NOLs are applied. Federal amended tax return Use a copy of the appropriate year's Form 1041, check the “Amended return” box, and follow the Form 1041 instructions for amended returns. Federal amended tax return Include the NOL deduction with other deductions not subject to the 2% limit (line 15a). Federal amended tax return Also, see the special procedures for filing an amended return due to an NOL carryback, explained under Form 1040X , later. Federal amended tax return Form 1045. Federal amended tax return   You can apply for a quick refund by filing Form 1045. Federal amended tax return This form results in a tentative adjustment of tax in the carryback year. Federal amended tax return See the Illustrated Form 1045 . Federal amended tax return at the end of this discussion. Federal amended tax return   If the IRS refunds or credits an amount to you from Form 1045 and later determines that the refund or credit is too much, the IRS may assess and collect the excess immediately. Federal amended tax return   Generally, you must file Form 1045 on or after the date you file your tax return for the NOL year, but not later than one year after the end of the NOL year. Federal amended tax return If the last day of the NOL year falls on a Saturday, Sunday, or holiday, the form will be considered timely if postmarked on the next business day. Federal amended tax return For example, if you are a calendar year taxpayer with a carryback from 2013 to 2011, you must file Form 1045 on or after the date you file your tax return for 2013, but no later than December 31, 2014. Federal amended tax return Form 1040X. Federal amended tax return   If you do not file Form 1045, you can file Form 1040X to get a refund of tax because of an NOL carryback. Federal amended tax return File Form 1040X within 3 years after the due date, including extensions, for filing the return for the NOL year. Federal amended tax return For example, if you are a calendar year taxpayer and filed your 2011 return by the April 15, 2012, due date, you must file a claim for refund of 2008 tax because of an NOL carryback from 2011 by April 15, 2015. Federal amended tax return   Attach a computation of your NOL using Form 1045, Schedule A, and, if it applies, your NOL carryover using Form 1045, Schedule B, discussed later . Federal amended tax return Refiguring your tax. Federal amended tax return   To refigure your total tax liability for a carryback year, first refigure your adjusted gross income for that year. Federal amended tax return (On Form 1045, use lines 10 and 11 and the “After carryback” column for the applicable carryback year. Federal amended tax return ) Use your adjusted gross income after applying the NOL deduction to refigure income or deduction items that are based on, or limited to, a percentage of your adjusted gross income. Federal amended tax return Refigure the following items. Federal amended tax return The special allowance for passive activity losses from rental real estate activities. Federal amended tax return Taxable social security and tier 1 railroad retirement benefits. Federal amended tax return IRA deductions. Federal amended tax return Excludable savings bond interest. Federal amended tax return Excludable employer-provided adoption benefits. Federal amended tax return The student loan interest deduction. Federal amended tax return The tuition and fees deduction. Federal amended tax return   If more than one of these items apply, refigure them in the order listed above, using your adjusted gross income after applying the NOL deduction and any previous item. Federal amended tax return (Enter your NOL deduction on Form 1045, line 10. Federal amended tax return On line 11, using the “After carryback” column, enter your adjusted gross income refigured after applying the NOL deduction and after refiguring any above items. Federal amended tax return )   Next, refigure your taxable income. Federal amended tax return (On Form 1045, use lines 12 through 15 and the “After carryback” column. Federal amended tax return ) Use your refigured adjusted gross income (Form 1045, line 11, using the “After carryback” column) to refigure certain deductions and other items that are based on or limited to a percentage of your adjusted gross income. Federal amended tax return Refigure the following items. Federal amended tax return The itemized deduction for medical expenses. Federal amended tax return The itemized deduction for qualified mortgage insurance premiums. Federal amended tax return The itemized deduction for casualty losses. Federal amended tax return Miscellaneous itemized deductions subject to the 2% limit. Federal amended tax return The overall limit on itemized deductions (do not apply to carryback years beginning after December 31, 2009). Federal amended tax return The phaseout of the deduction for exemptions (do not apply to carryback years beginning after December 31, 2009). Federal amended tax return Qualified motor vehicle tax (do not apply to carryback years beginning after December 31, 2009). Federal amended tax return    Do not refigure the itemized deduction for charitable contributions. Federal amended tax return   Finally, use your refigured taxable income (Form 1045, line 15, using the “After carryback” column) to refigure your total tax liability. Federal amended tax return Refigure your income tax, your alternative minimum tax, and any credits that are based on or limited by your adjusted gross income (AGI), modified adjusted gross income (MAGI), or tax liability. Federal amended tax return (On Form 1045, use lines 16 through 25, and the “After carryback” column. Federal amended tax return ) The earned income credit, for example, may be affected by changes to adjusted gross income or the amount of tax (or both) and, therefore, must be recomputed. Federal amended tax return If you become eligible for a credit because of the carryback, complete the form for that specific credit (such as the EIC Worksheet) for that year. Federal amended tax return   While it is necessary to refigure your income tax, alternative minimum tax, and credits, do not refigure your self-employment tax. Federal amended tax return Deducting a Carryforward If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the “Other income” line of Form 1040 or Form 1040NR (line 21 for 2013). Federal amended tax return Estates and trusts include an NOL deduction on Form 1041 with other deductions not subject to the 2% limit (line 15a for 2013). Federal amended tax return You must attach a statement that shows all the important facts about the NOL. Federal amended tax return Your statement should include a computation showing how you figured the NOL deduction. Federal amended tax return If you deduct more than one NOL in the same year, your statement must cover each of them. Federal amended tax return Change in Marital Status If you and your spouse were not married to each other in all years involved in figuring NOL carrybacks and carryovers, only the spouse who had the loss can take the NOL deduction. Federal amended tax return If you file a joint return, the NOL deduction is limited to the income of that spouse. Federal amended tax return For example, if your marital status changes because of death or divorce, and in a later year you have an NOL, you can carry back that loss only to the part of the income reported on the joint return (filed with your former spouse) that was related to your taxable income. Federal amended tax return After you deduct the NOL in the carryback year, the joint rates apply to the resulting taxable income. Federal amended tax return Refund limit. Federal amended tax return   If you are not married in the NOL year (or are married to a different spouse), and in the carryback year you were married and filed a joint return, your refund for the overpaid joint tax may be limited. Federal amended tax return You can claim a refund for the difference between your share of the refigured tax and your contribution toward the tax paid on the joint return. Federal amended tax return The refund cannot be more than the joint overpayment. Federal amended tax return Attach a statement showing how you figured your refund. Federal amended tax return Figuring your share of a joint tax liability. Federal amended tax return   There are five steps for figuring your share of the refigured joint tax liability. Federal amended tax return Figure your total tax as though you had filed as married filing separately. Federal amended tax return Figure your spouse's total tax as though your spouse had also filed as married filing separately. Federal amended tax return Add the amounts in (1) and (2). Federal amended tax return Divide the amount in (1) by the amount in (3). Federal amended tax return Multiply the refigured tax on your joint return by the amount figured in (4). Federal amended tax return This is your share of the joint tax liability. Federal amended tax return Figuring your contribution toward tax paid. Federal amended tax return   Unless you have an agreement or clear evidence of each spouse's contributions toward the payment of the joint tax liability, figure your contribution by adding the tax withheld on your wages and your share of joint estimated tax payments or tax paid with the return. Federal amended tax return If the original return for the carryback year resulted in an overpayment, reduce your contribution by your share of the tax refund. Federal amended tax return Figure your share of a joint payment or refund by the same method used in figuring your share of the joint tax liability. Federal amended tax return Use your taxable income as originally reported on the joint return in steps (1) and (2) above, and substitute the joint payment or refund for the refigured joint tax in step (5). Federal amended tax return Change in Filing Status If you and your spouse were married and filed a joint return for each year involved in figuring NOL carrybacks and carryovers, figure the NOL deduction on a joint return as you would for an individual. Federal amended tax return However, treat the NOL deduction as a joint NOL. Federal amended tax return If you and your spouse were married and filed separate returns for each year involved in figuring NOL carrybacks and carryovers, the spouse who sustained the loss may take the NOL deduction on a separate return. Federal amended tax return Special rules apply for figuring the NOL carrybacks and carryovers of married people whose filing status changes for any tax year involved in figuring an NOL carryback or carryover. Federal amended tax return Separate to joint return. Federal amended tax return   If you and your spouse file a joint return for a carryback or carryforward year, and were married but filed separate returns for any of the tax years involved in figuring the NOL carryback or carryover, treat the separate carryback or carryover as a joint carryback or carryover. Federal amended tax return Joint to separate returns. Federal amended tax return   If you and your spouse file separate returns for a carryback or carryforward year, but filed a joint return for any or all of the tax years involved in figuring the NOL carryover, figure each of your carryovers separately. Federal amended tax return Joint return in NOL year. Federal amended tax return   Figure each spouse's share of the joint NOL through the following steps. Federal amended tax return Figure each spouse's NOL as if he or she filed a separate return. Federal amended tax return See How To Figure an NOL , earlier. Federal amended tax return If only one spouse has an NOL, stop here. Federal amended tax return All of the joint NOL is that spouse's NOL. Federal amended tax return If both spouses have an NOL, multiply the joint NOL by a fraction, the numerator of which is spouse A's NOL figured in (1) and the denominator of which is the total of the spouses' NOLs figured in (1). Federal amended tax return The result is spouse A's share of the joint NOL. Federal amended tax return The rest of the joint NOL is spouse B's share. Federal amended tax return Example 1. Federal amended tax return Mark and Nancy are married and file a joint return for 2013. Federal amended tax return They have an NOL of $5,000. Federal amended tax return They carry the NOL back to 2011, a year in which Mark and Nancy filed separate returns. Federal amended tax return Figured separately, Nancy's 2013 deductions were more than her income, and Mark's income was more than his deductions. Federal amended tax return Mark does not have any NOL to carry back. Federal amended tax return Nancy can carry back the entire $5,000 NOL to her 2011 separate return. Federal amended tax return Example 2. Federal amended tax return Assume the same facts as in Example 1 , except that both Mark and Nancy had deductions in 2013 that were more than their income. Federal amended tax return Figured separately, his NOL is $1,800 and her NOL is $3,000. Federal amended tax return The sum of their separate NOLs ($4,800) is less than their $5,000 joint NOL because his deductions included a $200 net capital loss that is not allowed in figuring his separate NOL. Federal amended tax return The loss is allowed in figuring their joint NOL because it was offset by Nancy's capital gains. Federal amended tax return Mark's share of their $5,000 joint NOL is $1,875 ($5,000 × $1,800/$4,800) and Nancy's is $3,125 ($5,000 − $1,875). Federal amended tax return Joint return in previous carryback or carryforward year. Federal amended tax return   If only one spouse had an NOL deduction on the previous year's joint return, all of the joint carryover is that spouse's carryover. Federal amended tax return If both spouses had an NOL deduction (including separate carryovers of a joint NOL, figured as explained in the previous discussion ), figure each spouse's share of the joint carryover through the following steps. Federal amended tax return Figure each spouse's modified taxable income as if he or she filed a separate return. Federal amended tax return See Modified taxable income under How To Figure an NOL Carryover , later. Federal amended tax return Multiply the joint modified taxable income you used to figure the joint carryover by a fraction, the numerator of which is spouse A's modified taxable income figured in (1) and the denominator of which is the total of the spouses' modified taxable incomes figured in (1). Federal amended tax return This is spouse A's share of the joint modified taxable income. Federal amended tax return Subtract the amount figured in (2) from the joint modified taxable income. Federal amended tax return This is spouse B's share of the joint modified taxable income. Federal amended tax return Reduce the amount figured in (3), but not below zero, by spouse B's NOL deduction. Federal amended tax return Add the amounts figured in (2) and (4). Federal amended tax return Subtract the amount figured in (5) from spouse A's NOL deduction. Federal amended tax return This is spouse A's share of the joint carryover. Federal amended tax return The rest of the joint carryover is spouse B's share. Federal amended tax return Example. Federal amended tax return Sam and Wanda filed a joint return for 2011 and separate returns for 2012 and 2013. Federal amended tax return In 2013, Sam had an NOL of $18,000 and Wanda had an NOL of $2,000. Federal amended tax return They choose to carry back both NOLs 2 years to their 2011 joint return and claim a $20,000 NOL deduction. Federal amended tax return Their joint modified taxable income (MTI) for 2011 is $15,000, and their joint NOL carryover to 2012 is $5,000 ($20,000 – $15,000). Federal amended tax return Sam and Wanda each figure their separate MTI for 2011 as if they had filed separate returns. Federal amended tax return Then they figure their shares of the $5,000 carryover as follows. Federal amended tax return Step 1. Federal amended tax return   Sam's separate MTI $9,000 Wanda's separate MTI + 3,000 Total MTI $12,000 Step 2. Federal amended tax return   Joint MTI $15,000 Sam's MTI ÷ total MTI ($9,000 ÷ $12,000) × . Federal amended tax return 75 Sam's share of joint MTI $11,250 Step 3. Federal amended tax return   Joint MTI $15,000 Sam's share of joint MTI − 11,250 Wanda's share of joint MTI $3,750 Step 4. Federal amended tax return   Wanda's share of joint MTI $3,750 Wanda's NOL deduction − 2,000 Wanda's remaining share $1,750 Step 5. Federal amended tax return   Sam's share of joint MTI $11,250 Wanda's remaining share + 1,750 Joint MTI to be offset $13,000 Step 6. Federal amended tax return   Sam's NOL deduction $18,000 Joint MTI to be offset − 13,000 Sam's carryover to 2012 $5,000 Joint carryover to 2012 $5,000 Sam's carryover − 5,000 Wanda's carryover to 2012 $-0- Wanda's $2,000 NOL deduction offsets $2,000 of her $3,750 share of the joint modified taxable income and is completely used up. Federal amended tax return She has no carryover to 2012. Federal amended tax return Sam's $18,000 NOL deduction offsets all of his $11,250 share of joint modified taxable income and the remaining $1,750 of Wanda's share. Federal amended tax return His carryover to 2012 is $5,000. Federal amended tax return Illustrated Form 1045 The following example illustrates how to use Form 1045 to claim an NOL deduction in a carryback year. Federal amended tax return It includes a filled-in page 1 of Form 1045. Federal amended tax return Example. Federal amended tax return Martha Sanders is a self-employed contractor. Federal amended tax return Martha's 2013 deductions are more than her 2013 income because of a business loss. Federal amended tax return She uses Form 1045 to carry back her NOL 2 years and claim an NOL deduction in 2011. Federal amended tax return Her filing status in both years was single. Federal amended tax return See the filled-in Form 1045 later. Federal amended tax return Martha figures her 2013 NOL on Form 1045, Schedule A (not shown). Federal amended tax return (For an example using Form 1045, Schedule A, see Illustrated Form 1045, Schedule A under How To Figure an NOL , earlier. Federal amended tax return ) She enters the $10,000 NOL from Form 1045, Schedule A, line 25, on Form 1045, line 1a. Federal amended tax return Martha completes lines 10 through 25, using the “Before carryback” column under the column for the second preceding tax year ended 12/31/11 on page 1 of Form 1045 using the following amounts from her 2011 return. Federal amended tax return 2011 Adjusted gross income $50,000 Itemized deductions:     Medical expenses [$6,000 − ($50,000 × 7. Federal amended tax return 5%)] $2,250   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions $13,250 Exemption $3,700 Income tax $4,550 Self-employment tax $6,120   Martha refigures her taxable income for 2011 after carrying back her 2013 NOL as follows: 2011 Adjusted gross income $50,000 Less:     NOL from 2013 −10,000 2011 Adjusted gross income after carryback $40,000 Less:     Itemized deductions:     Medical expenses [$6,000 − ($40,000 × 7. Federal amended tax return 5%)] $3,000   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions −14,000 Less:     Exemption − 3,700 2011 Taxable income after carryback $22,300 Martha then completes lines 10 through 25, using the “After carryback” column under the column for the second preceding tax year ended 12/31/11. Federal amended tax return On line 10, Martha enters her $10,000 NOL deduction. Federal amended tax return Her new adjusted gross income on line 11 is $40,000 ($50,000 − $10,000). Federal amended tax return To complete line 12, she must refigure her medical expense deduction using her new adjusted gross income. Federal amended tax return Her refigured medical expense deduction is $3,000 [$6,000 − ($40,000 × 7. Federal amended tax return 5%)]. Federal amended tax return This increases her total itemized deductions to $14,000 [$13,250 + ($3,000 − $2,250)]. Federal amended tax return Martha uses her refigured taxable income ($22,300) from line 15, and the tax tables in her 2011 Form 1040 instructions to find her income tax. Federal amended tax return She enters the new amount, $2,924, on line 16, and her new total tax liability, $9,044, on line 25. Federal amended tax return Martha used up her $10,000 NOL in 2011 so she does not complete a column for the first preceding tax year ended 12/31/2012. Federal amended tax return The decrease in tax because of her NOL deduction (line 27) is $1,612. Federal amended tax return Martha files Form 1045 after filing her 2013 return, but no later than December 31, 2014. Federal amended tax return She mails it to the Internal Revenue Service Center for the place where she lives as shown in the 2013 instructions for Form 1040 and attaches a copy of her 2013 return (including the applicable forms and schedules). Federal amended tax return This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1045, page 1 How To Figure an NOL Carryover If your NOL is more than your taxable income for the year to which you carry it (figured before deducting the NOL), you may have an NOL carryover. Federal amended tax return You must make certain modifications to your taxable income to determine how much NOL you will use up in that year and how much you can carry over to the next tax year. Federal amended tax return Your carryover is the excess of your NOL deduction over your modified taxable income for the carryback or carryforward year. Federal amended tax return If your NOL deduction includes more than one NOL, apply the NOLs against your modified taxable income in the same order in which you incurred them, starting with the earliest. Federal amended tax return Modified taxable income. Federal amended tax return   Your modified taxable income is your taxable income figured with the following changes. Federal amended tax return You cannot claim an NOL deduction for the NOL carryover you are figuring or for any later NOL. Federal amended tax return You cannot claim a deduction for capital losses in excess of your capital gains. Federal amended tax return Also, you must increase your taxable income by the amount of any section 1202 exclusion. Federal amended tax return You cannot claim the domestic production activities deduction. Federal amended tax return You cannot claim a deduction for your exemptions for yourself, your spouse, or dependents. Federal amended tax return You must figure any item affected by the amount of your adjusted gross income after making the changes in (1), (2), and (3), above, and certain other changes to your adjusted gross income that result from (1), (2), and (3). Federal amended tax return This includes income and deduction items used to figure adjusted gross income (for example, IRA deductions), as well as certain itemized deductions. Federal amended tax return To figure a charitable contribution deduction, do not include deductions for NOL carrybacks in the change in (1) but do include deductions for NOL carryforwards from tax years before the NOL year. Federal amended tax return   Your taxable income as modified cannot be less than zero. Federal amended tax return Form 1045, Schedule B. Federal amended tax return   You can use Form 1045, Schedule B, to figure your modified taxable income for carryback years and your carryover from each of those years. Federal amended tax return Do not use Form 1045, Schedule B, for a carryforward year. Federal amended tax return If your 2013 return includes an NOL deduction from an NOL year before 2013 that reduced your taxable income to zero (to less than zero, if an estate or trust), see NOL Carryover From 2013 to 2014 , later. Federal amended tax return Illustrated Form 1045, Schedule B The following example illustrates how to figure an NOL carryover from a carryback year. Federal amended tax return It includes a filled-in Form 1045, Schedule B. Federal amended tax return Example. Federal amended tax return Ida Brown runs a small clothing shop. Federal amended tax return In 2013, she has an NOL of $36,000 that she carries back to 2011. Federal amended tax return She has no other carrybacks or carryforwards to 2011. Federal amended tax return Ida's adjusted gross income in 2011 was $35,000, consisting of her salary of $36,000 minus a $1,000 capital loss deduction. Federal amended tax return She is single and claimed only one personal exemption of $3,700. Federal amended tax return During that year, she gave $1,450 in charitable contributions. Federal amended tax return Her medical expenses were $3,000. Federal amended tax return She also deducted $1,650 in taxes and $3,125 in home mortgage interest. Federal amended tax return Her deduction for charitable contributions was not limited because her contributions, $1,450, were less than 50% of her adjusted gross income. Federal amended tax return The deduction for medical expenses was limited to expenses over 7. Federal amended tax return 5% of adjusted gross income (. Federal amended tax return 075 × $35,000 = $2,625; $3,000 − $2,625 = $375). Federal amended tax return The deductions for taxes and home mortgage interest were not subject to any limits. Federal amended tax return She was able to claim $6,600 ($1,450 + $375 + $1,650 + $3,125) in itemized deductions and a personal exemption deduction of $3,700 for 2011. Federal amended tax return She had no other deductions in 2011 (except the NOL deduction). Federal amended tax return Her taxable income (figured without the NOL deduction) for the year was $24,700. Federal amended tax return Ida's adjusted gross income in 2012 was $9,325, consisting of net business income from the clothing shop of $12,325 and a net capital loss of $3,000. Federal amended tax return She did not itemize her deductions in 2012. Federal amended tax return She deducted the standard deduction of $5,950 and the personal exemption deduction of $3,800. Federal amended tax return She had no other deductions in 2012 (other than the NOL deduction). Federal amended tax return Her taxable income, therefore, was ($425). Federal amended tax return Ida's $36,000 carryback will result in her having 2011 taxable income of zero. Federal amended tax return She then completes the column for the second preceding tax year ended 12/31/11 on Form 1045, Schedule B, to figure how much of her NOL she uses up in 2011 and how much she can carry over to 2012. Federal amended tax return She completes the column for the first preceding tax year ended 12/31/12. Federal amended tax return See the illustrated Form 1045, Schedule B , shown later. Federal amended tax return Column 1, line 1. Federal amended tax return Ida enters $36,000, her 2013 net operating loss, on line 1. Federal amended tax return Column 1, line 2. Federal amended tax return She enters $24,700, her 2011 taxable income (figured without the NOL deduction), on line 2. Federal amended tax return Column 1, line 3. Federal amended tax return Ida enters her net capital loss deduction of $1,000 on line 3. Federal amended tax return Column 1, lines 4 and 5. Federal amended tax return Ida had no section 1202 exclusion or domestic production activities deduction in 2011. Federal amended tax return She enters zero on lines 4 and 5. Federal amended tax return Column 1, line 6. Federal amended tax return Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Federal amended tax return Ida enters zero on line 6. Federal amended tax return Column 1, line 7. Federal amended tax return Ida had itemized deductions and entered $1,000 on line 3, so she completes lines 11 through 38 to figure her adjustment to itemized deductions. Federal amended tax return On line 7, she enters the total adjustment from line 38. Federal amended tax return Column 1, line 8. Federal amended tax return Ida enters the deduction for her personal exemption of $3,700 for 2011. Federal amended tax return Column 1, line 9. Federal amended tax return After combining lines 2 through 8, Ida's modified taxable income is $29,475. Federal amended tax return Column 1, line 10. Federal amended tax return Ida figures her carryover to 2012 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Federal amended tax return She enters the $6,525 carryover on line 10. Federal amended tax return She also enters the $6,525 as her NOL deduction for 2012 on Form 1045, page 1, line 10, in the “After carryback” column under the column for the first preceding tax year ended 12/31/12. Federal amended tax return (For an illustrated example of page 1 of Form 1045, see Illustrated Form 1045 under How To Claim an NOL Deduction , earlier. Federal amended tax return ) Next, Ida completes column 2 for the first preceding tax year ended 12/31/12. Federal amended tax return Column 1, line 11. Federal amended tax return Ida's adjusted gross income for 2011 was $35,000. Federal amended tax return Column 1, line 12. Federal amended tax return She adds lines 3 through 6 and enters $1,000 on line 12. Federal amended tax return (This is her net capital loss deduction added back, which modifies her adjusted gross income. Federal amended tax return ) Column 1, line 13. Federal amended tax return Her modified adjusted gross income for 2011 is now $36,000. Federal amended tax return Column 1, line 14. Federal amended tax return On her 2011 tax return, she deducted $375 as medical expenses. Federal amended tax return Column 1, line 15. Federal amended tax return Her actual medical expenses were $3,000. Federal amended tax return Column 1, line 16. Federal amended tax return She multiplies her modified adjusted gross income, $36,000, by . Federal amended tax return 075. Federal amended tax return She enters $2,700 on line 16. Federal amended tax return Column 1, line 17. Federal amended tax return She substracts $2,700 from her actual medical expenses, $3,000. Federal amended tax return She enters $300 on line 17. Federal amended tax return This is her modified medical deduction. Federal amended tax return Column 1, line 18. Federal amended tax return The difference between her medical deduction and her modified medical deduction is $75. Federal amended tax return She enters this on line 18. Federal amended tax return Column 1, lines 19 through 21. Federal amended tax return Ida had no deduction for qualified mortgage insurance premiums in 2011. Federal amended tax return She skips lines 19 and 20 and enters zero on line 21. Federal amended tax return Column 1, line 22. Federal amended tax return She enters her modified adjusted gross income of $36,000 on line 22. Federal amended tax return Column 1, line 23. Federal amended tax return She had no other carrybacks to 2011 and enters zero on line 23. Federal amended tax return Column 1, line 24. Federal amended tax return Her modified adjusted gross income remains $36,000. Federal amended tax return Column 1, line 25. Federal amended tax return Her actual contributions for 2011 were $1,450, which she enters on line 25. Federal amended tax return Column 1, line 26. Federal amended tax return She now refigures her charitable contributions based on her modified adjusted gross income. Federal amended tax return Her contributions are well below the 50% limit, so she enters $1,450 on line 26. Federal amended tax return Column 1, line 27. Federal amended tax return The difference is zero. Federal amended tax return Column 1, lines 28 through 37. Federal amended tax return Ida had no casualty losses or deductions for miscellaneous items in 2011. Federal amended tax return She skips lines 28 through 31 and lines 33 through 36. Federal amended tax return Ida enters zero on lines 32 and 37. Federal amended tax return Column 1, line 38. Federal amended tax return She combines lines 18, 21, 27, 32, and 37 and enters $75 on line 38. Federal amended tax return She carries this figure to line 7. Federal amended tax return Column 2, line 1. Federal amended tax return Ida enters $6,525, the carryback of her 2013 NOL to 2012, from column 1, line 10, on line 1. Federal amended tax return Column 2, line 2. Federal amended tax return She enters ($425), her 2012 taxable income, on line 2. Federal amended tax return Column 2, line 3. Federal amended tax return Ida enters her net capital loss deduction of $3,000 on line 3. Federal amended tax return Column 2, lines 4 and 5. Federal amended tax return Ida had no section 1202 exclusion or domestic production activities deduction in 2012. Federal amended tax return She enters zero on lines 4 and 5. Federal amended tax return Column 2, line 6. Federal amended tax return Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Federal amended tax return Ida enters zero on line 6. Federal amended tax return Column 2, line 7. Federal amended tax return Because Ida did not itemize deductions on her 2012 tax return, she enters zero on line 7. Federal amended tax return Column 2, line 8. Federal amended tax return Ida enters the deduction for her personal exemption of $3,800 for 2012. Federal amended tax return Column 2, line 9. Federal amended tax return After combining lines 2 through 8, Ida's modified taxable income is $6,375. Federal amended tax return Column 2, line 10. Federal amended tax return Ida figures her carryforward to 2014 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Federal amended tax return She enters the $150 carryover on line 10. Federal amended tax return This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1045, page 3 This image is too large to be displayed in the current screen. Federal amended tax return Please click the link to view the image. Federal amended tax return Form 1045, page 4 NOL Carryover From 2013 to 2014 If you had an NOL deduction carried forward from a year prior to 2013 that resulted in your having taxable income on your 2013 return of zero (of less than zero, if an estate or trust), complete Table 1 , Worksheet for NOL Carryover From 2013 to 2014, on the following pages. Federal amended tax return It will help you figure your NOL to carry to 2014. Federal amended tax return Keep the worksheet for your records. Federal amended tax return Worksheet Instructions At the top of the worksheet, enter the NOL year for which you are figuring the carryover. Federal amended tax return More than one NOL. Federal amended tax return   If your 2013 NOL deduction includes amounts for more than one loss year, complete this worksheet only for one loss year. Federal amended tax return To determine which year, start with your earliest NOL and subtract each NOL separately from your taxable income figured without the NOL deduction. Federal amended tax return Complete this worksheet for the earliest NOL that results in your having taxable income below zero. Federal amended tax return Your NOL carryover to 2014 is the total of the amount on line 10 of the worksheet and all later NOL amounts. Federal amended tax return Example. Federal amended tax return Your taxable income for 2013 is $5,000 without your $9,000 NOL deduction. Federal amended tax return Your NOL deduction includes a $2,000 carryover from 2011 and a $7,000 carryover from 2012. Federal amended tax return Subtract your 2011 NOL of $2,000 from $5,000. Federal amended tax return This gives you taxable income of $3,000. Federal amended tax return Your 2011 NOL is now completely used up. Federal amended tax return Subtract your $7,000 2012 NOL from $3,000. Federal amended tax return This gives you taxable income of ($4,000). Federal amended tax return You now complete the worksheet for your 2012 NOL. Federal amended tax return Your NOL carryover to 2014 is the unused part of your 2012 NOL from line 10 of the worksheet. Federal amended tax return Line 2. Federal amended tax return   Treat your NOL deduction for the NOL year entered at the top of the worksheet and later years as a positive amount. Federal amended tax return Add it to your negative taxable income (figured without the NOL deduction). Federal amended tax return Enter the result on line 2. Federal amended tax return Line 6. Federal amended tax return   You must refigure the following income and deductions based on adjusted gross income. Federal amended tax return The special allowance for passive activity losses from rental real estate activities. Federal amended tax return Taxable social security and tier 1 railroad retirement benefits. Federal amended tax return IRA deductions. Federal amended tax return Excludable savings bond interest. Federal amended tax return Excludable employer-provided adoption benefits. Federal amended tax return The student loan interest deduction. Federal amended tax return The tuition and fees deduction. Federal amended tax return   If none of these items apply to you, enter zero on line 6. Federal amended tax return Otherwise, increase your adjusted gross income by the total of lines 3 through 5 and your NOL deduction for the NOL year entered at the top of the worksheet and later years. Federal amended tax return Using this increased adjusted gross income, refigure the items that apply, in the order listed above. Federal amended tax return Your adjustment for each item is the difference between the refigured amount and the amount included on your return. Federal amended tax return Combine the adjustments for previous items with your adjusted gross income before refiguring the next item. Federal amended tax return Keep a record of your computations. Federal amended tax return   Enter your total adjustments for the above items on line 6. Federal amended tax return Line 7. Federal amended tax return   Enter zero if you claimed the standard deduction or the amounts on lines 3 through 5 are zero. Federal amended tax return Otherwise, use lines 11 through 33 of the worksheet to figure the amount to enter on this line. Federal amended tax return Complete only those sections that apply to you. Federal amended tax return Estates and trusts. Federal amended tax return   Enter zero on line 7 if you did not claim any miscellaneous deductions on Form 1041, line 15c, or a casualty or theft loss. Federal amended tax return Otherwise, refigure these deductions by substituting modified adjusted gross income (see below ) for adjusted gross income. Federal amended tax return Subtract the recomputed deductions from those claimed on the return. Federal amended tax return Enter the result on line 7. Federal amended tax return Modified adjusted gross income. Federal amended tax return   To refigure miscellaneous itemized deductions of an estate or trust (Form 1041, line 15c), modified adjusted gross income is the total of the following amounts. Federal amended tax return The adjusted gross income on the return. Federal amended tax return The amounts from lines 3 through 5 of the worksheet. Federal amended tax return The exemption amount from Form 1041, line 20. Federal amended tax return The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Federal amended tax return   To refigure the casualty and theft loss deduction of an estate or trust, modified adjusted gross income is the total of the following amounts. Federal amended tax return The adjusted gross income amount you used to figure the deduction claimed on the return. Federal amended tax return The amounts from lines 3 through 5 of the worksheet. Federal amended tax return The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Federal amended tax return Line 11. Federal amended tax return   Treat your NOL deduction for the NOL year entered at the top of the worksheet and for later years as a positive amount. Federal amended tax return Add it to your adjusted gross income. Federal amended tax return Enter the result on line 11. Federal amended tax return Line 20. Federal amended tax return   Is your modified adjusted gross income from line 13 of this worksheet more than $100,000 ($50,000 if married filing separately)?   □ Yes. Federal amended tax return Your deduction is limited. Federal amended tax return Refigure your deduction using the Mortgage Insurance Premiums Deduction Worksheet in the 2013 Instructions for Form 1045. Federal amended tax return On line 2 of the Mortgage Insurance Premiums Deduction Worksheet, enter the amount from line 13 of this worksheet. Federal amended tax return   □ No. Federal amended tax return Your deduction is not limited. Federal amended tax return Enter the amount from line 19 on line 20 and enter -0- on line 21. Federal amended tax return Line 23. Federal amended tax return   If you had a contributions carryover from 2012 to 2013 and your NOL deduction includes an amount from an NOL year before 2012, you may have to reduce your contributions carryover. Federal amended tax return Reduce the contributions carryover by the amount of any adjustment you made to your 2012 charitable contributions deduction when figuring your NOL carryover to 2013. Federal amended tax return Use the reduced contributions carryover to figure the amount to enter on line 23. Federal amended tax return Please click here for the text description of the image. Federal amended tax return Worksheet for NOL Carryover Worksheet for NOL Carryover (Continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Federal amended tax return Free help with your tax return. Federal amended tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. Federal amended tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Federal amended tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Federal amended tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Federal amended tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Federal amended tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Federal amended tax return gov, download the IRS2Go app, or call 1-800-906-9887. Federal amended tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. Federal amended tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. Federal amended tax return aarp. Federal amended tax return org/money/taxaide or call 1-888-227-7669. Federal amended tax return For more information on these programs, go to IRS. Federal amended tax return gov and enter “VITA” in the search box. Federal amended tax return Internet. Federal amended tax return    IRS. Federal amended tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Federal amended tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Federal amended tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Federal amended tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. Federal amended tax return gov or download the IRS2Go app and select the Refund Status option. Federal amended tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Federal amended tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Federal amended tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Federal amended tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Federal amended tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. Federal amended tax return No need to wait on the phone or stand in line. Federal amended tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Federal amended tax return When you reach the response screen, you can print the entire interview and the final response for your records. Federal amended tax return New subject areas are added on a regular basis. Federal amended tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Federal amended tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Federal amended tax return You can use the IRS Tax Map to search publications and instructions by topic or keyword. Federal amended tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Federal amended tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Federal amended tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Federal amended tax return You can also ask the IRS to mail a return or an account transcript to you. Federal amended tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Federal amended tax return gov or by calling 1-800-908-9946. Federal amended tax return Tax return and tax account transcripts are generally available for the current year and the past three years. Federal amended tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Federal amended tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Federal amended tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Federal amended tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. Federal amended tax return gov and enter Where's My Amended Return? in the search box. Federal amended tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Federal amended tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Federal amended tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. Federal amended tax return gov. Federal amended tax return Select the Payment tab on the front page of IRS. Federal amended tax return gov for more information. Federal amended tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Federal amended tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. Federal amended tax return gov. Federal amended tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Federal amended tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Federal amended tax return gov. Federal amended tax return Request an Electronic Filing PIN by going to IRS. Federal amended tax return gov and entering Electronic Filing PIN in the search box. Federal amended tax return Download forms, instructions and publications, including accessible versions for people with disabilities. Federal amended tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Federal amended tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Federal amended tax return An employee can answer questions about your tax account or help you set up a payment plan. Federal amended tax return Before you visit, check the Office Locator on IRS. Federal amended tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Federal amended tax return If you have a special need, such as a disability, you can request an appointment. Federal amended tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Federal amended tax return Apply for an Employer Identification Number (EIN). Federal amended tax return Go to IRS. Federal amended tax return gov and enter Apply for an EIN in the search box. Federal amended tax return Read the Internal Revenue Code, regulations, or other official guidance. Federal amended tax return Read Internal Revenue Bulletins. Federal amended tax return Sign up to receive local and national tax news and more by email. Federal amended tax return Just click on “subscriptions” above the search box on IRS. Federal amended tax return gov and choose from a variety of options. Federal amended tax return Phone. Federal amended tax return    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Federal amended tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Federal amended tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Federal amended tax return gov, or download the IRS2Go app. Federal amended tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Federal amended tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Federal amended tax return Most VITA and TCE sites offer free electronic filing. Federal amended tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Federal amended tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Federal amended tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Federal amended tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Federal amended tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Federal amended tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Federal amended tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Federal amended tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Federal amended tax return Note, the above information is for our automated hotline. Federal amended tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Federal amended tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Federal amended tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Federal amended tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Federal amended tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Federal amended tax return You should receive your order within 10 business days. Federal amended tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Federal amended tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Federal amended tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Federal amended tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Federal amended tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. Federal amended tax return Walk-in. Federal amended tax return   You can find a selection of forms, publications and services — in person. Federal amended tax return Products. Federal amended tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Federal amended tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Federal amended tax return Services. Federal amended tax return You can walk in to your local TAC for face-to-face tax help. Federal amended tax return An employee can answer questions about your tax account or help you set up a payment plan. Federal amended tax return Before visiting, use the Office Locator tool on IRS. Federal amended tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Federal amended tax return Mail. Federal amended tax return   You can send your order for forms, instructions, and publications to the address below. Federal amended tax return You should receive a response within 10 business days after your request is received. Federal amended tax return Internal Revenue Service 1201 N. Federal amended tax return Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Federal amended tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. Federal amended tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Federal amended tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Federal amended tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Federal amended tax return You face (or your business is facing) an immediate threat of adverse action. Federal amended tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Federal amended tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Federal amended tax return Here's why we can help: TAS is an independent organization within the IRS. Federal amended tax return Our advocates know how to work with the IRS. Federal amended tax return Our services are free and tailored to meet your needs. Federal amended tax return We have offices in every state, the District of Columbia, and Puerto Rico. Federal amended tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Federal amended tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Federal amended tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Federal amended tax return Low Income Taxpayer Clinics Low Income
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The Federal Amended Tax Return

Federal amended tax return 5. Federal amended tax return   Taxes Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: When To Deduct Taxes Real Estate TaxesSeparate elections. Federal amended tax return Making the election. Federal amended tax return Form 3115. Federal amended tax return Income TaxesAccrual of contested income taxes. Federal amended tax return Employment Taxes Other TaxesAdditional Medicare Tax. Federal amended tax return What's New Additional Medicare Tax. Federal amended tax return  Beginning in 2013, you must withhold a 0. Federal amended tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Federal amended tax return Also, self-employed individuals may be required to pay Additional Medicare Tax on self-employment income. Federal amended tax return See Employment Taxes , and Self-employment tax , later. Federal amended tax return Introduction You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses. Federal amended tax return You cannot deduct federal income taxes, estate and gift taxes, or state inheritance, legacy, and succession taxes. Federal amended tax return Topics - This chapter discusses: When to deduct taxes Real estate taxes Income taxes Employment taxes Other taxes Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 334 Tax Guide for Small Business 510 Excise Taxes 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch SE (Form 1040) Self-Employment Tax 3115 Application for Change in Accounting Method 8959 Additional Medicare Tax See chapter 12 for information about getting publications and forms. Federal amended tax return When To Deduct Taxes Generally, you can only deduct taxes in the year you pay them. Federal amended tax return This applies whether you use the cash method or an accrual method of accounting. Federal amended tax return Under an accrual method, you can deduct a tax before you pay it if you meet the exception for recurring items discussed under Economic Performance in Publication 538. Federal amended tax return You can also elect to ratably accrue real estate taxes as discussed later under Real Estate Taxes . Federal amended tax return Limit on accrual of taxes. Federal amended tax return   A taxing jurisdiction can require the use of a date for accruing taxes that is earlier than the date it originally required. Federal amended tax return However, if you use an accrual method, and can deduct the tax before you pay it, use the original accrual date for the year of change and all future years to determine when you can deduct the tax. Federal amended tax return Example. Federal amended tax return Your state imposes a tax on personal property used in a trade or business conducted in the state. Federal amended tax return This tax is assessed and becomes a lien as of July 1 (accrual date). Federal amended tax return In 2013, the state changed the assessment and lien dates from July 1, 2014, to December 31, 2013, for property tax year 2014. Federal amended tax return Use the original accrual date (July 1, 2014) to determine when you can deduct the tax. Federal amended tax return You must also use the July 1 accrual date for all future years to determine when you can deduct the tax. Federal amended tax return Uniform capitalization rules. Federal amended tax return   Uniform capitalization rules apply to certain taxpayers who produce real property or tangible personal property for use in a trade or business or for sale to customers. Federal amended tax return They also apply to certain taxpayers who acquire property for resale. Federal amended tax return Under these rules, you either include certain costs in inventory or capitalize certain expenses related to the property, such as taxes. Federal amended tax return For more information, see chapter 1. Federal amended tax return Carrying charges. Federal amended tax return   Carrying charges include taxes you pay to carry or develop real estate or to carry, transport, or install personal property. Federal amended tax return You can elect to capitalize carrying charges not subject to the uniform capitalization rules if they are otherwise deductible. Federal amended tax return For more information, see chapter 7. Federal amended tax return Refunds of taxes. Federal amended tax return   If you receive a refund for any taxes you deducted in an earlier year, include the refund in income to the extent the deduction reduced your federal income tax in the earlier year. Federal amended tax return For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1. Federal amended tax return    You must include in income any interest you receive on tax refunds. Federal amended tax return Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. Federal amended tax return 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. Federal amended tax return Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Federal amended tax return See Taxes for local benefits , later. Federal amended tax return If you use an accrual method, you generally cannot accrue real estate taxes until you pay them to the government authority. Federal amended tax return However, you can elect to ratably accrue the taxes during the year. Federal amended tax return See Electing to ratably accrue , later. Federal amended tax return Taxes for local benefits. Federal amended tax return   Generally, you cannot deduct taxes charged for local benefits and improvements that tend to increase the value of your property. Federal amended tax return These include assessments for streets, sidewalks, water mains, sewer lines, and public parking facilities. Federal amended tax return You should increase the basis of your property by the amount of the assessment. Federal amended tax return   You can deduct taxes for these local benefits only if the taxes are for maintenance, repairs, or interest charges related to those benefits. Federal amended tax return If part of the tax is for maintenance, repairs, or interest, you must be able to show how much of the tax is for these expenses to claim a deduction for that part of the tax. Federal amended tax return Example. Federal amended tax return To improve downtown commercial business, Waterfront City converted a downtown business area street into an enclosed pedestrian mall. Federal amended tax return The city assessed the full cost of construction, financed with 10-year bonds, against the affected properties. Federal amended tax return The city is paying the principal and interest with the annual payments made by the property owners. Federal amended tax return The assessments for construction costs are not deductible as taxes or as business expenses, but are depreciable capital expenses. Federal amended tax return The part of the payments used to pay the interest charges on the bonds is deductible as taxes. Federal amended tax return Charges for services. Federal amended tax return   Water bills, sewerage, and other service charges assessed against your business property are not real estate taxes, but are deductible as business expenses. Federal amended tax return Purchase or sale of real estate. Federal amended tax return   If real estate is sold, the real estate taxes must be allocated between the buyer and the seller. Federal amended tax return   The buyer and seller must allocate the real estate taxes according to the number of days in the real property tax year (the period to which the tax imposed relates) that each owned the property. Federal amended tax return Treat the seller as paying the taxes up to but not including the date of sale. Federal amended tax return Treat the buyer as paying the taxes beginning with the date of sale. Federal amended tax return You can usually find this information on the settlement statement you received at closing. Federal amended tax return   If you (the seller) use an accrual method and have not elected to ratably accrue real estate taxes, you are considered to have accrued your part of the tax on the date you sell the property. Federal amended tax return Example. Federal amended tax return Alberto Verde, a calendar year accrual method taxpayer, owns real estate in Olmo County. Federal amended tax return He has not elected to ratably accrue property taxes. Federal amended tax return November 30 of each year is the assessment and lien date for the current real property tax year, which is the calendar year. Federal amended tax return He sold the property on June 30, 2013. Federal amended tax return Under his accounting method he would not be able to claim a deduction for the taxes because the sale occurred before November 30. Federal amended tax return He is treated as having accrued his part of the tax, 181/366  (January 1–June 29), on June 30, and he can deduct it for 2013. Federal amended tax return Electing to ratably accrue. Federal amended tax return   If you use an accrual method, you can elect to accrue real estate tax related to a definite period ratably over that period. Federal amended tax return Example. Federal amended tax return Juan Sanchez is a calendar year taxpayer who uses an accrual method. Federal amended tax return His real estate taxes for the real property tax year, July 1, 2013, to June 30, 2014, are $1,200. Federal amended tax return July 1 is the assessment and lien date. Federal amended tax return If Juan elects to ratably accrue the taxes, $600 will accrue in 2013 ($1,200 × 6/12, July 1–December 31) and the balance will accrue in 2014. Federal amended tax return Separate elections. Federal amended tax return   You can elect to ratably accrue the taxes for each separate trade or business and for nonbusiness activities if you account for them separately. Federal amended tax return Once you elect to ratably accrue real estate taxes, you must use that method unless you get permission from the IRS to change. Federal amended tax return See Form 3115 , later. Federal amended tax return Making the election. Federal amended tax return   If you elect to ratably accrue the taxes for the first year in which you incur real estate taxes, attach a statement to your income tax return for that year. Federal amended tax return The statement should show all the following items. Federal amended tax return The trades or businesses to which the election applies and the accounting method or methods used. Federal amended tax return The period to which the taxes relate. Federal amended tax return The computation of the real estate tax deduction for that first year. Federal amended tax return   Generally, you must file your return by the due date (including extensions). Federal amended tax return However, if you timely filed your return for the year without electing to ratably accrue, you can still make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). Federal amended tax return Attach the statement to the amended return and write “Filed pursuant to section 301. Federal amended tax return 9100-2” on the statement. Federal amended tax return File the amended return at the same address where you filed the original return. Federal amended tax return Form 3115. Federal amended tax return    If you elect to ratably accrue real estate taxes for a year after the first year in which you incur real estate taxes, or if you want to revoke your election to ratably accrue real estate taxes, file Form 3115. Federal amended tax return For more information, including applicable time frames for filing, see the Instructions for Form 3115. Federal amended tax return Note. Federal amended tax return If you are filing an application for a change in accounting method filed after January 9, 2011, for a year of change ending after April 29, 2010, see Revenue Procedure 2011-14, 2011-4 I. Federal amended tax return R. Federal amended tax return B. Federal amended tax return 330, as modified and clarified by Revenue Procedure 2012-19, 2012-14 I. Federal amended tax return R. Federal amended tax return B. Federal amended tax return 689, and Revenue Procedure 2012-20, 2012-14 I. Federal amended tax return R. Federal amended tax return B. Federal amended tax return 700, or any successor. Federal amended tax return Revenue Procedure 2011-14 is available at  www. Federal amended tax return irs. Federal amended tax return gov/irb/2011-04IRB/ar08. Federal amended tax return html. Federal amended tax return Income Taxes This section discusses federal, state, local, and foreign income taxes. Federal amended tax return Federal income taxes. Federal amended tax return   You cannot deduct federal income taxes. Federal amended tax return State and local income taxes. Federal amended tax return   A corporation or partnership can deduct state and local income taxes imposed on the corporation or partnership as business expenses. Federal amended tax return An individual can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). Federal amended tax return   However, an individual can deduct a state tax on gross income (as distinguished from net income) directly attributable to a trade or business as a business expense. Federal amended tax return Accrual of contested income taxes. Federal amended tax return   If you use an accrual method, and you contest a state or local income tax liability, you must accrue and deduct any contested amount in the tax year in which the liability is finally determined. Federal amended tax return   If additional state or local income taxes for a prior year are assessed in a later year, you can deduct the taxes in the year in which they were originally imposed (the prior year) if the tax liability is not contested. Federal amended tax return You cannot deduct them in the year in which the liability is finally determined. Federal amended tax return    The filing of an income tax return is not considered a contest and, in the absence of an overt act of protest, you can deduct the tax in the prior year. Federal amended tax return Also, you can deduct any additional taxes in the prior year if you do not show some affirmative evidence of denial of the liability. Federal amended tax return   However, if you consistently deduct additional assessments in the year they are paid or finally determined (including those for which there was no contest), you must continue to do so. Federal amended tax return You cannot take a deduction in the earlier year unless you receive permission to change your method of accounting. Federal amended tax return For more information on accounting methods, see When Can I Deduct an Expense in chapter 1. Federal amended tax return Foreign income taxes. Federal amended tax return   Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Federal amended tax return S. Federal amended tax return possession. Federal amended tax return However, an individual cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Federal amended tax return S. Federal amended tax return tax under the foreign earned income exclusion or the foreign housing exclusion. Federal amended tax return For information on these exclusions, see Publication 54, Tax Guide for U. Federal amended tax return S. Federal amended tax return Citizens and Resident Aliens Abroad. Federal amended tax return For information on the foreign tax credit, see Publication 514, Foreign Tax Credit for Individuals. Federal amended tax return Employment Taxes If you have employees, you must withhold various taxes from your employees' pay. Federal amended tax return Most employers must withhold their employees' share of social security, Medicare taxes, and Additional Medicare Tax (if applicable) along with state and federal income taxes. Federal amended tax return You may also need to pay certain employment taxes from your own funds. Federal amended tax return These include your share of social security and Medicare taxes as an employer, along with unemployment taxes. Federal amended tax return Note. Federal amended tax return Additional Medicare Tax is only imposed on the employee. Federal amended tax return There is no employer share of Additional Medicare Tax. Federal amended tax return Your deduction for wages paid is not reduced by the social security and Medicare taxes, Additional Medicare Tax, and income taxes you withhold from your employees. Federal amended tax return You can deduct the employment taxes you must pay from your own funds as taxes. Federal amended tax return Example. Federal amended tax return You pay your employee $18,000 a year. Federal amended tax return However, after you withhold various taxes, your employee receives $14,500. Federal amended tax return You also pay an additional $1,500 in employment taxes. Federal amended tax return You should deduct the full $18,000 as wages. Federal amended tax return You can deduct the $1,500 you pay from your own funds as taxes. Federal amended tax return For more information on employment taxes, see Publication 15 (Circular E). Federal amended tax return Unemployment fund taxes. Federal amended tax return   As an employer, you may have to make payments to a state unemployment compensation fund or to a state disability benefit fund. Federal amended tax return Deduct these payments as taxes. Federal amended tax return Other Taxes The following are other taxes you can deduct if you incur them in the ordinary course of your trade or business. Federal amended tax return Excise taxes. Federal amended tax return   Generally, you can deduct as a business expense all excise taxes that are ordinary and necessary expenses of carrying on your trade or business. Federal amended tax return However, see Fuel taxes , later. Federal amended tax return   For more information on excise taxes, see Publication 510. Federal amended tax return Franchise taxes. Federal amended tax return   You can deduct corporate franchise taxes as a business expense. Federal amended tax return Fuel taxes. Federal amended tax return   Generally, taxes on gasoline, diesel fuel, and other motor fuels that you use in your business are included as part of the cost of the fuel. Federal amended tax return Do not deduct these taxes as a separate item. Federal amended tax return   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. Federal amended tax return For more information, see Publication 510. Federal amended tax return Occupational taxes. Federal amended tax return   You can deduct as a business expense an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Federal amended tax return Personal property tax. Federal amended tax return   You can deduct any tax imposed by a state or local government on personal property used in your trade or business. Federal amended tax return Sales tax. Federal amended tax return   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. Federal amended tax return 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. Federal amended tax return If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. Federal amended tax return If the property is depreciable, add the sales tax to the basis for depreciation. Federal amended tax return For more information on basis, see Publication 551. Federal amended tax return    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. Federal amended tax return Also, do not include these taxes in gross receipts or sales. Federal amended tax return Self-employment tax. Federal amended tax return   You can deduct part of your self-employment tax as a business expense in figuring your adjusted gross income. Federal amended tax return This deduction only affects your income tax. Federal amended tax return It does not affect your net earnings from self-employment or your self-employment tax. Federal amended tax return   To deduct the tax, enter on Form 1040, line 27, the amount shown on the Deduction for one-half of self-employment tax line of Schedule SE (Form 1040). Federal amended tax return   For more information on self-employment tax, see Publication 334. Federal amended tax return Additional Medicare Tax. Federal amended tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax on self-employment income. Federal amended tax return See Form 8959 and the Instructions for Form 8959 for more information on the Additional Medicare Tax. Federal amended tax return Prev  Up  Next   Home   More Online Publications