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Federal Income Tax Forms For 2012

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Federal Income Tax Forms For 2012

Federal income tax forms for 2012 2. Federal income tax forms for 2012   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. Federal income tax forms for 2012 You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. Federal income tax forms for 2012 Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. Federal income tax forms for 2012 You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. Federal income tax forms for 2012 You can deduct depreciation only on the part of your property used for rental purposes. Federal income tax forms for 2012 Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. Federal income tax forms for 2012 You may have to use Form 4562 to figure and report your depreciation. Federal income tax forms for 2012 See Which Forms To Use in chapter 3. Federal income tax forms for 2012 Also see Publication 946. Federal income tax forms for 2012 Section 179 deduction. Federal income tax forms for 2012   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. Federal income tax forms for 2012 This deduction is not allowed for property used in connection with residential rental property. Federal income tax forms for 2012 See chapter 2 of Publication 946. Federal income tax forms for 2012 Alternative minimum tax (AMT). Federal income tax forms for 2012   If you use accelerated depreciation, you may be subject to the AMT. Federal income tax forms for 2012 Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). Federal income tax forms for 2012   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. Federal income tax forms for 2012 However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). Federal income tax forms for 2012   To find out if you are subject to the AMT, see the Instructions for Form 6251. Federal income tax forms for 2012 The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. Federal income tax forms for 2012 What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. Federal income tax forms for 2012 You own the property. Federal income tax forms for 2012 You use the property in your business or income-producing activity (such as rental property). Federal income tax forms for 2012 The property has a determinable useful life. Federal income tax forms for 2012 The property is expected to last more than one year. Federal income tax forms for 2012 Property you own. Federal income tax forms for 2012   To claim depreciation, you usually must be the owner of the property. Federal income tax forms for 2012 You are considered as owning property even if it is subject to a debt. Federal income tax forms for 2012 Rented property. Federal income tax forms for 2012   Generally, if you pay rent for property, you cannot depreciate that property. Federal income tax forms for 2012 Usually, only the owner can depreciate it. Federal income tax forms for 2012 However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. Federal income tax forms for 2012 See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. Federal income tax forms for 2012 Cooperative apartments. Federal income tax forms for 2012   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. Federal income tax forms for 2012 See chapter 4, Special Situations. Federal income tax forms for 2012 Property having a determinable useful life. Federal income tax forms for 2012   To be depreciable, your property must have a determinable useful life. Federal income tax forms for 2012 This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Federal income tax forms for 2012 What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. Federal income tax forms for 2012 This includes land and certain excepted property. Federal income tax forms for 2012 Land. Federal income tax forms for 2012   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. Federal income tax forms for 2012 But if it does, the loss is accounted for upon disposition. Federal income tax forms for 2012 The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. Federal income tax forms for 2012   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. Federal income tax forms for 2012 These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. Federal income tax forms for 2012 Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. Federal income tax forms for 2012 If you replace the house, you would have to destroy the bushes and trees right next to it. Federal income tax forms for 2012 These bushes and trees are closely associated with the house, so they have a determinable useful life. Federal income tax forms for 2012 Therefore, you can depreciate them. Federal income tax forms for 2012 Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. Federal income tax forms for 2012 Excepted property. Federal income tax forms for 2012   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. Federal income tax forms for 2012 Property placed in service and disposed of (or taken out of business use) in the same year. Federal income tax forms for 2012 Equipment used to build capital improvements. Federal income tax forms for 2012 You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. Federal income tax forms for 2012 For more information, see chapter 1 of Publication 946. Federal income tax forms for 2012 When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. Federal income tax forms for 2012 You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. Federal income tax forms for 2012 Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. Federal income tax forms for 2012 Even if you are not using the property, it is in service when it is ready and available for its specific use. Federal income tax forms for 2012 Example 1. Federal income tax forms for 2012 On November 22 of last year, you purchased a dishwasher for your rental property. Federal income tax forms for 2012 The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. Federal income tax forms for 2012 Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. Federal income tax forms for 2012 If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. Federal income tax forms for 2012 Example 2. Federal income tax forms for 2012 On April 6, you purchased a house to use as residential rental property. Federal income tax forms for 2012 You made extensive repairs to the house and had it ready for rent on July 5. Federal income tax forms for 2012 You began to advertise the house for rent in July and actually rented it beginning September 1. Federal income tax forms for 2012 The house is considered placed in service in July when it was ready and available for rent. Federal income tax forms for 2012 You can begin to depreciate the house in July. Federal income tax forms for 2012 Example 3. Federal income tax forms for 2012 You moved from your home in July. Federal income tax forms for 2012 During August and September you made several repairs to the house. Federal income tax forms for 2012 On October 1, you listed the property for rent with a real estate company, which rented it on December 1. Federal income tax forms for 2012 The property is considered placed in service on October 1, the date when it was available for rent. Federal income tax forms for 2012 Conversion to business use. Federal income tax forms for 2012   If you place property in service in a personal activity, you cannot claim depreciation. Federal income tax forms for 2012 However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. Federal income tax forms for 2012 You place the property in service for business or income-producing use on the date of the change. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You bought a house and used it as your personal home several years before you converted it to rental property. Federal income tax forms for 2012 Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. Federal income tax forms for 2012 You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. Federal income tax forms for 2012 Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). Federal income tax forms for 2012 For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. Federal income tax forms for 2012 Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. Federal income tax forms for 2012 For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. Federal income tax forms for 2012 See Basis of Depreciable Property , later. Federal income tax forms for 2012 Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. Federal income tax forms for 2012 You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. Federal income tax forms for 2012 You sell or exchange the property. Federal income tax forms for 2012 You convert the property to personal use. Federal income tax forms for 2012 You abandon the property. Federal income tax forms for 2012 The property is destroyed. Federal income tax forms for 2012 Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. Federal income tax forms for 2012 If you placed rental property in service before 1987, you are using one of the following methods. Federal income tax forms for 2012 ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. Federal income tax forms for 2012 Straight line or declining balance method over the useful life of property placed in service before 1981. Federal income tax forms for 2012 See MACRS Depreciation , later, for more information. Federal income tax forms for 2012 Rental property placed in service before 2013. Federal income tax forms for 2012   Continue to use the same method of figuring depreciation that you used in the past. Federal income tax forms for 2012 Use of real property changed. Federal income tax forms for 2012   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. Federal income tax forms for 2012 This includes your residence that you changed to rental use. Federal income tax forms for 2012 See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. Federal income tax forms for 2012 Improvements made after 1986. Federal income tax forms for 2012   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. Federal income tax forms for 2012 As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. Federal income tax forms for 2012 For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. Federal income tax forms for 2012 This publication discusses MACRS depreciation only. Federal income tax forms for 2012 If you need information about depreciating property placed in service before 1987, see Publication 534. Federal income tax forms for 2012 Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. Federal income tax forms for 2012 This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. Federal income tax forms for 2012 If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. Federal income tax forms for 2012 Basis and adjusted basis are explained in the following discussions. Federal income tax forms for 2012 If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. Federal income tax forms for 2012 See Basis of Property Changed to Rental Use in chapter 4. Federal income tax forms for 2012 Cost Basis The basis of property you buy is usually its cost. Federal income tax forms for 2012 The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. Federal income tax forms for 2012 Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. Federal income tax forms for 2012 Exception. Federal income tax forms for 2012   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. Federal income tax forms for 2012 Such taxes were deductible before 1987 and after 2003. Federal income tax forms for 2012 Loans with low or no interest. Federal income tax forms for 2012   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. Federal income tax forms for 2012 See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. Federal income tax forms for 2012 Real property. Federal income tax forms for 2012   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. Federal income tax forms for 2012 Real estate taxes. Federal income tax forms for 2012   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. Federal income tax forms for 2012 You cannot deduct them as taxes paid. Federal income tax forms for 2012   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. Federal income tax forms for 2012 Do not include that amount in your basis in the property. Federal income tax forms for 2012 Settlement fees and other costs. Federal income tax forms for 2012   The following settlement fees and closing costs for buying the property are part of your basis in the property. Federal income tax forms for 2012 Abstract fees. Federal income tax forms for 2012 Charges for installing utility services. Federal income tax forms for 2012 Legal fees. Federal income tax forms for 2012 Recording fees. Federal income tax forms for 2012 Surveys. Federal income tax forms for 2012 Transfer taxes. Federal income tax forms for 2012 Title insurance. Federal income tax forms for 2012 Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Federal income tax forms for 2012   The following are settlement fees and closing costs you cannot include in your basis in the property. Federal income tax forms for 2012 Fire insurance premiums. Federal income tax forms for 2012 Rent or other charges relating to occupancy of the property before closing. Federal income tax forms for 2012 Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. Federal income tax forms for 2012   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Federal income tax forms for 2012 Assumption of a mortgage. Federal income tax forms for 2012   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. Federal income tax forms for 2012 Your basis is $300,000. Federal income tax forms for 2012 Separating cost of land and buildings. Federal income tax forms for 2012   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. Federal income tax forms for 2012 The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. Federal income tax forms for 2012   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You buy a house and land for $200,000. Federal income tax forms for 2012 The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. Federal income tax forms for 2012 The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. Federal income tax forms for 2012 You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. Federal income tax forms for 2012 Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). Federal income tax forms for 2012 Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. Federal income tax forms for 2012 If you received property in one of these ways, see Publication 551 for information on how to figure your basis. Federal income tax forms for 2012 Adjusted Basis To figure your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service for business or the production of income. Federal income tax forms for 2012 The result of these adjustments to the basis is the adjusted basis. Federal income tax forms for 2012 Increases to basis. Federal income tax forms for 2012   You must increase the basis of any property by the cost of all items properly added to a capital account. Federal income tax forms for 2012 These include the following. Federal income tax forms for 2012 The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. Federal income tax forms for 2012 Amounts spent after a casualty to restore the damaged property. Federal income tax forms for 2012 The cost of extending utility service lines to the property. Federal income tax forms for 2012 Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. Federal income tax forms for 2012 Additions or improvements. Federal income tax forms for 2012   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. Federal income tax forms for 2012 This includes all direct costs, such as material and labor, but does not include your own labor. Federal income tax forms for 2012 It also includes all expenses related to the addition or improvement. Federal income tax forms for 2012   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. Federal income tax forms for 2012 Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. Federal income tax forms for 2012   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. Federal income tax forms for 2012 For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. Federal income tax forms for 2012    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. Federal income tax forms for 2012 However, see What Rental Property Cannot Be Depreciated, earlier. Federal income tax forms for 2012 Assessments for local improvements. Federal income tax forms for 2012   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. Federal income tax forms for 2012 For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. Federal income tax forms for 2012 Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. Federal income tax forms for 2012 You cannot deduct these items as taxes or depreciate them. Federal income tax forms for 2012    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. Federal income tax forms for 2012 Do not add them to your basis in the property. Federal income tax forms for 2012 Deducting vs. Federal income tax forms for 2012 capitalizing costs. Federal income tax forms for 2012   Do not add to your basis costs you can deduct as current expenses. Federal income tax forms for 2012 However, there are certain costs you can choose either to deduct or to capitalize. Federal income tax forms for 2012 If you capitalize these costs, include them in your basis. Federal income tax forms for 2012 If you deduct them, do not include them in your basis. Federal income tax forms for 2012   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. Federal income tax forms for 2012   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. Federal income tax forms for 2012 Decreases to basis. Federal income tax forms for 2012   You must decrease the basis of your property by any items that represent a return of your cost. Federal income tax forms for 2012 These include the following. Federal income tax forms for 2012 Insurance or other payment you receive as the result of a casualty or theft loss. Federal income tax forms for 2012 Casualty loss not covered by insurance for which you took a deduction. Federal income tax forms for 2012 Amount(s) you receive for granting an easement. Federal income tax forms for 2012 Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. Federal income tax forms for 2012 Exclusion from income of subsidies for energy conservation measures. Federal income tax forms for 2012 Special depreciation allowance claimed on qualified property. Federal income tax forms for 2012 Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. Federal income tax forms for 2012 If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. Federal income tax forms for 2012   If your rental property was previously used as your main home, you must also decrease the basis by the following. Federal income tax forms for 2012 Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. Federal income tax forms for 2012 District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. Federal income tax forms for 2012 Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. Federal income tax forms for 2012 Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. Federal income tax forms for 2012 This allowance is figured before you figure your regular depreciation deduction. Federal income tax forms for 2012 See Publication 946, chapter 3, for details. Federal income tax forms for 2012 Also see the Instructions for Form 4562, Line 14. Federal income tax forms for 2012 If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. Federal income tax forms for 2012 The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. Federal income tax forms for 2012 MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. Federal income tax forms for 2012 This section explains how to determine which MACRS depreciation system applies to your property. Federal income tax forms for 2012 It also discusses other information you need to know before you can figure depreciation under MACRS. Federal income tax forms for 2012 This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. Federal income tax forms for 2012 Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Federal income tax forms for 2012 You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. Federal income tax forms for 2012 Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. Federal income tax forms for 2012 In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. Federal income tax forms for 2012 However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. Federal income tax forms for 2012 For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. Federal income tax forms for 2012 Electing ADS If you choose, you can use the ADS method for most property. Federal income tax forms for 2012 Under ADS, you use the straight line method of depreciation. Federal income tax forms for 2012 The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. Federal income tax forms for 2012 However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. Federal income tax forms for 2012 If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. Federal income tax forms for 2012 Once you make this election, you can never revoke it. Federal income tax forms for 2012 For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. Federal income tax forms for 2012 Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. Federal income tax forms for 2012 The property class generally determines the depreciation method, recovery period, and convention. Federal income tax forms for 2012 The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. Federal income tax forms for 2012 Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. Federal income tax forms for 2012 5-year property. Federal income tax forms for 2012 This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. Federal income tax forms for 2012 ), automobiles, and light trucks. Federal income tax forms for 2012 This class also includes appliances, carpeting, furniture, etc. Federal income tax forms for 2012 , used in a residential rental real estate activity. Federal income tax forms for 2012 Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. Federal income tax forms for 2012 See chapter 5 of Publication 946. Federal income tax forms for 2012 7-year property. Federal income tax forms for 2012 This class includes office furniture and equipment (desks, file cabinets, etc. Federal income tax forms for 2012 ). Federal income tax forms for 2012 This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. Federal income tax forms for 2012 15-year property. Federal income tax forms for 2012 This class includes roads, fences, and shrubbery (if depreciable). Federal income tax forms for 2012 Residential rental property. Federal income tax forms for 2012 This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. Federal income tax forms for 2012 It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. Federal income tax forms for 2012 If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. Federal income tax forms for 2012 The other property classes do not generally apply to property used in rental activities. Federal income tax forms for 2012 These classes are not discussed in this publication. Federal income tax forms for 2012 See Publication 946 for more information. Federal income tax forms for 2012 Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. Federal income tax forms for 2012 The recovery periods are generally longer under ADS than GDS. Federal income tax forms for 2012 The recovery period of property depends on its property class. Federal income tax forms for 2012 Under GDS, the recovery period of an asset is generally the same as its property class. Federal income tax forms for 2012 Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. Federal income tax forms for 2012 See Table 2-1 for recovery periods of property commonly used in residential rental activities. Federal income tax forms for 2012 Qualified Indian reservation property. Federal income tax forms for 2012   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. Federal income tax forms for 2012 For more information, see chapter 4 of Publication 946. Federal income tax forms for 2012 Additions or improvements to property. Federal income tax forms for 2012   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. Federal income tax forms for 2012   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. Federal income tax forms for 2012   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. Federal income tax forms for 2012 You built an addition onto the house and placed it in service in 2013. Federal income tax forms for 2012 You must use MACRS for the addition. Federal income tax forms for 2012 Under GDS, the addition is depreciated as residential rental property over 27. Federal income tax forms for 2012 5 years. Federal income tax forms for 2012 Table 2-1. Federal income tax forms for 2012 MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. Federal income tax forms for 2012 27. Federal income tax forms for 2012 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. Federal income tax forms for 2012   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. Federal income tax forms for 2012 The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. Federal income tax forms for 2012 Mid-month convention. Federal income tax forms for 2012    A mid-month convention is used for all residential rental property and nonresidential real property. Federal income tax forms for 2012 Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. Federal income tax forms for 2012 Mid-quarter convention. Federal income tax forms for 2012   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. Federal income tax forms for 2012   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 During the tax year, Tom Martin purchased the following items to use in his rental property. Federal income tax forms for 2012 He elects not to claim the special depreciation allowance discussed earlier. Federal income tax forms for 2012 A dishwasher for $400 that he placed in service in January. Federal income tax forms for 2012 Used furniture for $100 that he placed in service in September. Federal income tax forms for 2012 A refrigerator for $800 that he placed in service in October. Federal income tax forms for 2012 Tom uses the calendar year as his tax year. Federal income tax forms for 2012 The total basis of all property placed in service that year is $1,300. Federal income tax forms for 2012 The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). Federal income tax forms for 2012 Tom must use the mid-quarter convention instead of the half-year convention for all three items. Federal income tax forms for 2012 Half-year convention. Federal income tax forms for 2012    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. Federal income tax forms for 2012 Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. Federal income tax forms for 2012   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. Federal income tax forms for 2012 You deduct a full year of depreciation for any other year during the recovery period. Federal income tax forms for 2012 Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. Federal income tax forms for 2012 The deduction is substantially the same both ways. Federal income tax forms for 2012 You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. Federal income tax forms for 2012 In this publication we will use the percentage tables. Federal income tax forms for 2012 For instructions on how to compute the deduction, see chapter 4 of Publication 946. Federal income tax forms for 2012 Residential rental property. Federal income tax forms for 2012   You must use the straight line method and a mid-month convention for residential rental property. Federal income tax forms for 2012 In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). Federal income tax forms for 2012 5-, 7-, or 15-year property. Federal income tax forms for 2012   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. Federal income tax forms for 2012 However, in limited cases you must use the mid-quarter convention, if it applies. Federal income tax forms for 2012 For property in the 15-year class, use the 150% declining balance method and a half-year convention. Federal income tax forms for 2012   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. Federal income tax forms for 2012 The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. Federal income tax forms for 2012 You make this election on Form 4562. Federal income tax forms for 2012 In Part III, column (f), enter “150 DB. Federal income tax forms for 2012 ” Once you make this election, you cannot change to another method. Federal income tax forms for 2012   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. Federal income tax forms for 2012   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. Federal income tax forms for 2012 The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. Federal income tax forms for 2012 You elect the straight line method on Form 4562. Federal income tax forms for 2012 In Part III, column (f), enter “S/L. Federal income tax forms for 2012 ” Once you make this election, you cannot change to another method. Federal income tax forms for 2012 MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. Federal income tax forms for 2012 The tables show the percentages for the first few years or until the change to the straight line method is made. Federal income tax forms for 2012 See Appendix A of Publication 946 for complete tables. Federal income tax forms for 2012 The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. Federal income tax forms for 2012 If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. Federal income tax forms for 2012 How to use the percentage tables. Federal income tax forms for 2012   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. Federal income tax forms for 2012   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. Federal income tax forms for 2012   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. Federal income tax forms for 2012 For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . Federal income tax forms for 2012 See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. Federal income tax forms for 2012 Unadjusted basis. Federal income tax forms for 2012   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. Federal income tax forms for 2012   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. Federal income tax forms for 2012 For more information, see chapter 4 of Publication 946. Federal income tax forms for 2012 Please click here for the text description of the image. Federal income tax forms for 2012 Table 2-2 Tables 2-2a, 2-2b, and 2-2c. Federal income tax forms for 2012   The percentages in these tables take into account the half-year and mid-quarter conventions. Federal income tax forms for 2012 Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. Federal income tax forms for 2012 Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). Federal income tax forms for 2012 If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. Federal income tax forms for 2012 Example 1. Federal income tax forms for 2012 You purchased a stove and refrigerator and placed them in service in June. Federal income tax forms for 2012 Your basis in the stove is $600 and your basis in the refrigerator is $1,000. Federal income tax forms for 2012 Both are 5-year property. Federal income tax forms for 2012 Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. Federal income tax forms for 2012 For that year your depreciation deduction is $120 ($600 × . Federal income tax forms for 2012 20) for the stove and $200 ($1,000 × . Federal income tax forms for 2012 20) for the refrigerator. Federal income tax forms for 2012 For Year 2, the depreciation percentage is 32%. Federal income tax forms for 2012 That year's depreciation deduction will be $192 ($600 × . Federal income tax forms for 2012 32) for the stove and $320 ($1,000 × . Federal income tax forms for 2012 32) for the refrigerator. Federal income tax forms for 2012 Example 2. Federal income tax forms for 2012 Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. Federal income tax forms for 2012 Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . Federal income tax forms for 2012 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. Federal income tax forms for 2012 Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. Federal income tax forms for 2012 Your depreciation deduction for the refrigerator is $50 ($1,000 x . Federal income tax forms for 2012 05). Federal income tax forms for 2012 Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. Federal income tax forms for 2012 For that year, your depreciation deduction for the stove is $150 ($600 x . Federal income tax forms for 2012 25). Federal income tax forms for 2012 Table 2-2d. Federal income tax forms for 2012    Use this table when you are using the GDS 27. Federal income tax forms for 2012 5 year option for residential rental property. Federal income tax forms for 2012 Find the row for the month that you placed the property in service. Federal income tax forms for 2012 Use the percentages listed for that month to figure your depreciation deduction. Federal income tax forms for 2012 The mid-month convention is taken into account in the percentages shown in the table. Federal income tax forms for 2012 Continue to use the same row (month) under the column for the appropriate year. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You purchased a single family rental house for $185,000 and placed it in service on February 8. Federal income tax forms for 2012 The sales contract showed that the building cost $160,000 and the land cost $25,000. Federal income tax forms for 2012 Your basis for depreciation is its original cost, $160,000. Federal income tax forms for 2012 This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. Federal income tax forms for 2012 5 years. Federal income tax forms for 2012 Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. Federal income tax forms for 2012 182%. Federal income tax forms for 2012 That year's depreciation deduction is $5,091 ($160,000 x . Federal income tax forms for 2012 03182). Federal income tax forms for 2012 Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. Federal income tax forms for 2012 See Appendix B in Publication 946 for other property. Federal income tax forms for 2012 If your property is not listed in Appendix B, it is considered to have no class life. Federal income tax forms for 2012 Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. Federal income tax forms for 2012 Use the mid-month convention for residential rental property and nonresidential real property. Federal income tax forms for 2012 For all other property, use the half-year or mid-quarter convention, as appropriate. Federal income tax forms for 2012 See Publication 946 for ADS depreciation tables. Federal income tax forms for 2012 Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. Federal income tax forms for 2012 If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. Federal income tax forms for 2012 For more information, see Depreciation under Decreases to Basis in Publication 551. Federal income tax forms for 2012 If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. Federal income tax forms for 2012 S. Federal income tax forms for 2012 Individual Income Tax Return. Federal income tax forms for 2012 If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. Federal income tax forms for 2012 Filing an amended return. Federal income tax forms for 2012   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. Federal income tax forms for 2012 You claimed the incorrect amount because of a mathematical error made in any year. Federal income tax forms for 2012 You claimed the incorrect amount because of a posting error made in any year. Federal income tax forms for 2012 You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. Federal income tax forms for 2012 You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. Federal income tax forms for 2012   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. Federal income tax forms for 2012 This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. Federal income tax forms for 2012   If an amended return is allowed, you must file it by the later of the following dates. Federal income tax forms for 2012 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Federal income tax forms for 2012 A return filed before an unextended due date is considered filed on that due date. Federal income tax forms for 2012 2 years from the time you paid your tax for that year. Federal income tax forms for 2012 Changing your accounting method. Federal income tax forms for 2012   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. Federal income tax forms for 2012 In some instances, that consent is automatic. Federal income tax forms for 2012 For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. 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Understanding Your CP53A Notice

We tried to direct deposit your refund, but the financial institution couldn’t process it. We are researching your account, but it will take 8 to 10 weeks to reissue your refund.


What you need to do

  • If you don’t receive your refund check or a follow-up letter within 10 weeks, call us at 1-866-682-7451 x733.
  • If you call us before then, we won’t have any information about the status of your refund until we complete the research on your account.

Answers to Common Questions

Why was my direct deposit refund returned to the IRS?
A financial institution will reject a refund for a variety of reasons. Most often, one of the following items doesn’t match its records:

  • Name
  • SSN
  • Routing number
  • Account number

Why will it take up to 10 weeks to receive my refund?
We must research your account to determine if you are entitled to the refund. We try to balance customer service and tax compliance by reviewing tax returns to prevent fraudulent or erroneous refunds. However, these critical reviews add time to refund processing. Refund timeframes are also affected by:

  • Bankruptcy
  • An open audit
  • A balance due on a related account (such as a different tax year)

Will calling the IRS give me additional information or speed my refund?
No, calling the IRS won’t do anything to speed your refund. You don’t need to call us unless we ask you to. If we need more information to process your refund, we’ll contact you by mail. Our telephone assistors won’t be able to provide any additional information.

Is the estimated date my tax preparer, tax software, or “Where’s My Refund” provided a guarantee of when I’ll get my refund?
Unfortunately, we can’t guarantee the date when a taxpayer will get his or her refund. While we can provide an estimate, this is a “best-case scenario” where the tax return doesn’t require any additional review or corrections.We work hard to issue refunds as quickly as possible. However, you shouldn’t make major financial decisions based on the estimated issue date of a tax refund.

Can I direct part of my refund into my tax professional’s checking or savings account to pay my tax preparation fee?
No. You can direct your refund to any of your checking or savings accounts. You can’t direct your refund to someone else’s account (except for your spouse’s account when you have a joint refund).


Tips for next year

If you request a direct deposit refund, ensure the account you specify is in your name (or your spouse’s if you have a joint refund).

Page Last Reviewed or Updated: 04-Mar-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Federal Income Tax Forms For 2012

Federal income tax forms for 2012 4. Federal income tax forms for 2012   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. Federal income tax forms for 2012 Higher income taxpayers. Federal income tax forms for 2012 Minimum required for higher income taxpayers. Federal income tax forms for 2012 Estate or trust payments of estimated tax. Federal income tax forms for 2012 Lowering or eliminating the penalty. Federal income tax forms for 2012 ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. Federal income tax forms for 2012 Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. Federal income tax forms for 2012 You may understand this chapter better if you can refer to a copy of your latest federal income tax return. Federal income tax forms for 2012 No penalty. Federal income tax forms for 2012   Generally, you will not have to pay a penalty for 2013 if any of the following apply. Federal income tax forms for 2012 The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. Federal income tax forms for 2012 (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. Federal income tax forms for 2012 ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Federal income tax forms for 2012 Your total tax for 2013 (defined later) minus your withholding is less than $1,000. Federal income tax forms for 2012 You did not have a tax liability for 2012. Federal income tax forms for 2012 You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. Federal income tax forms for 2012 IRS can figure the penalty for you. Federal income tax forms for 2012   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. Federal income tax forms for 2012 Generally, the IRS will figure the penalty for you and send you a bill. Federal income tax forms for 2012   You only need to figure your penalty in the following three situations. Federal income tax forms for 2012 You are requesting a waiver of part, but not all, of the penalty. Federal income tax forms for 2012 You are using the annualized income installment method to figure the penalty. Federal income tax forms for 2012 You are treating the federal income tax withheld from your income as paid on the dates actually withheld. Federal income tax forms for 2012 However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. Federal income tax forms for 2012 See Form 2210 , later. Federal income tax forms for 2012 Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. Federal income tax forms for 2012 Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. Federal income tax forms for 2012 General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. Federal income tax forms for 2012 (Your 2012 tax return must cover a 12-month period. Federal income tax forms for 2012 ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. Federal income tax forms for 2012 Special rules for certain individuals. Federal income tax forms for 2012   There are special rules for farmers and fishermen and certain higher income taxpayers. Federal income tax forms for 2012 Farmers and fishermen. Federal income tax forms for 2012   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. Federal income tax forms for 2012   See Farmers and Fishermen , later. Federal income tax forms for 2012 Higher income taxpayers. Federal income tax forms for 2012   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . Federal income tax forms for 2012 This rule does not apply to farmers or fishermen. Federal income tax forms for 2012   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Federal income tax forms for 2012 Penalty figured separately for each period. Federal income tax forms for 2012   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. Federal income tax forms for 2012 This is true even if you are due a refund when you file your income tax return. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. Federal income tax forms for 2012 Early in January 2014, you made an estimate of your total 2013 tax. Federal income tax forms for 2012 Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. Federal income tax forms for 2012 On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. Federal income tax forms for 2012 Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. Federal income tax forms for 2012 You do not owe a penalty for your payment due January 15, 2014. Federal income tax forms for 2012 However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. Federal income tax forms for 2012 Minimum required each period. Federal income tax forms for 2012   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. Federal income tax forms for 2012 5% of your 2013 tax, or 25% of your 2012 tax. Federal income tax forms for 2012 (Your 2012 tax return must cover a 12-month period. Federal income tax forms for 2012 ) Minimum required for higher income taxpayers. Federal income tax forms for 2012   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. Federal income tax forms for 2012 5% for 25% in (2) under General Rule . Federal income tax forms for 2012 When penalty is charged. Federal income tax forms for 2012   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. Federal income tax forms for 2012 If a payment is mailed, the date of the U. Federal income tax forms for 2012 S. Federal income tax forms for 2012 postmark is considered the date of payment. Federal income tax forms for 2012   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. Federal income tax forms for 2012 ) is considered to be the date of payment. Federal income tax forms for 2012 Estate or trust payments of estimated tax. Federal income tax forms for 2012   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. Federal income tax forms for 2012 Amended returns. Federal income tax forms for 2012    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. Federal income tax forms for 2012 If you file an amended return after the due date of the original return, use the tax shown on the original return. Federal income tax forms for 2012   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. Federal income tax forms for 2012 This rule applies only if both original separate returns were filed on time. Federal income tax forms for 2012 2012 separate returns and 2013 joint return. Federal income tax forms for 2012    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. Federal income tax forms for 2012 You filed a separate return if you filed as single, head of household, or married filing separately. Federal income tax forms for 2012 2012 joint return and 2013 separate returns. Federal income tax forms for 2012    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. Federal income tax forms for 2012 You are filing a separate return if you file as single, head of household, or married filing separately. Federal income tax forms for 2012   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. Federal income tax forms for 2012 Then multiply the tax on the joint return by the following fraction. Federal income tax forms for 2012   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Federal income tax forms for 2012 Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. Federal income tax forms for 2012 Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. Federal income tax forms for 2012 For 2013, they file married filing separately. Federal income tax forms for 2012 Lisa figures her share of the tax on the 2012 joint return as follows. Federal income tax forms for 2012 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. Federal income tax forms for 2012 67% Lisa's part of tax on joint return ($6,484 × 88. Federal income tax forms for 2012 67%) $ 5,749 Form 2210. Federal income tax forms for 2012   In most cases, you do not need to file Form 2210. Federal income tax forms for 2012 The IRS will figure the penalty for you and send you a bill. Federal income tax forms for 2012 If you want us to figure the penalty for you, leave the penalty line on your return blank. Federal income tax forms for 2012 Do not file Form 2210. Federal income tax forms for 2012   To determine if you should file Form 2210, see Part II of Form 2210. Federal income tax forms for 2012 If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. Federal income tax forms for 2012 If you use Form 2210, you cannot file Form 1040EZ. Federal income tax forms for 2012   On Form 1040, enter the amount of your penalty on line 77. Federal income tax forms for 2012 If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. Federal income tax forms for 2012 If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. Federal income tax forms for 2012   On Form 1040A, enter the amount of your penalty on line 46. Federal income tax forms for 2012 If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. Federal income tax forms for 2012 If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. Federal income tax forms for 2012 Lowering or eliminating the penalty. Federal income tax forms for 2012    You may be able to lower or eliminate your penalty if you file Form 2210. Federal income tax forms for 2012 You must file Form 2210 with your return if any of the following applies. Federal income tax forms for 2012 You request a waiver. Federal income tax forms for 2012 See Waiver of Penalty , later. Federal income tax forms for 2012 You use the annualized income installment method. Federal income tax forms for 2012 See the explanation of this method under Annualized Income Installment Method (Schedule AI) . Federal income tax forms for 2012 You use your actual withholding for each payment period for estimated tax purposes. Federal income tax forms for 2012 See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). Federal income tax forms for 2012 You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. Federal income tax forms for 2012 Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. Federal income tax forms for 2012 Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. Federal income tax forms for 2012 Total tax for 2013. Federal income tax forms for 2012   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. Federal income tax forms for 2012    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Federal income tax forms for 2012 Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Federal income tax forms for 2012 The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Federal income tax forms for 2012 Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. Federal income tax forms for 2012   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Federal income tax forms for 2012   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Federal income tax forms for 2012 Note. Federal income tax forms for 2012 When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. Federal income tax forms for 2012 Paid through withholding. Federal income tax forms for 2012    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. Federal income tax forms for 2012 Add to that any write-in amount on line 72 identified as “Form 8689. Federal income tax forms for 2012 ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. Federal income tax forms for 2012 On Form 1040EZ, it is the amount on line 7. Federal income tax forms for 2012 No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. Federal income tax forms for 2012 S. Federal income tax forms for 2012 citizen or resident for the whole year. Federal income tax forms for 2012 For this rule to apply, your tax year must have included all 12 months of the year. Federal income tax forms for 2012 You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 Ray, who is single and 22 years old, was unemployed for a few months during 2012. Federal income tax forms for 2012 He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. Federal income tax forms for 2012 He had no other income. Federal income tax forms for 2012 Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). Federal income tax forms for 2012 He filed a return only to have his withheld income tax refunded to him. Federal income tax forms for 2012 In 2013, Ray began regular work as an independent contractor. Federal income tax forms for 2012 Ray made no estimated tax payments in 2013. Federal income tax forms for 2012 Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. Federal income tax forms for 2012 Total tax for 2012. Federal income tax forms for 2012   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. Federal income tax forms for 2012    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Federal income tax forms for 2012 Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Federal income tax forms for 2012 The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Federal income tax forms for 2012 Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. Federal income tax forms for 2012   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Federal income tax forms for 2012   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. Federal income tax forms for 2012 Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. Federal income tax forms for 2012 If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 The tax on Lori Lane's 2012 return was $12,400. Federal income tax forms for 2012 Her AGI was not more than $150,000 for either 2012 or 2013. Federal income tax forms for 2012 The tax on her 2013 return (Form 1040, line 55) is $13,044. Federal income tax forms for 2012 Line 56 (self-employment tax) is $8,902. Federal income tax forms for 2012 Her 2013 total tax is $21,946. Federal income tax forms for 2012 For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). Federal income tax forms for 2012 90% of her 2013 tax is $19,751. Federal income tax forms for 2012 Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. Federal income tax forms for 2012 The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. Federal income tax forms for 2012 Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. Federal income tax forms for 2012 Different 2012 filing status. Federal income tax forms for 2012    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. Federal income tax forms for 2012 Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. Federal income tax forms for 2012 If you qualify to use this method, it will result in the same penalty amount as the regular method. Federal income tax forms for 2012 However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. Federal income tax forms for 2012 You can use the short method only if you meet one of the following requirements. Federal income tax forms for 2012 You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). Federal income tax forms for 2012 You paid the same amount of estimated tax on each of the four payment due dates. Federal income tax forms for 2012 If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. Federal income tax forms for 2012 Note. Federal income tax forms for 2012 If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. Federal income tax forms for 2012 However, if the payment was only a few days early, the difference is likely to be small. Federal income tax forms for 2012 You cannot use the short method if any of the following apply. Federal income tax forms for 2012 You made any estimated tax payments late. Federal income tax forms for 2012 You checked box C or D in Part II of Form 2210. Federal income tax forms for 2012 You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. Federal income tax forms for 2012 S. Federal income tax forms for 2012 income tax withholding. Federal income tax forms for 2012 If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. Federal income tax forms for 2012 Also, you cannot use your actual withholding during each period to figure your payments for each period. Federal income tax forms for 2012 These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). Federal income tax forms for 2012 Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. Federal income tax forms for 2012 Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. Federal income tax forms for 2012 You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. Federal income tax forms for 2012 You paid one or more estimated tax payments on a date after the due date. Federal income tax forms for 2012 You paid at least one, but less than four, installments of estimated tax. Federal income tax forms for 2012 You paid estimated tax payments in un- equal amounts. Federal income tax forms for 2012 You use the annualized income installment method to figure your underpayment for each payment period. Federal income tax forms for 2012 You use your actual withholding during each payment period to figure your payments. Federal income tax forms for 2012 Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Federal income tax forms for 2012 Enter the results on line 27 of Section B. Federal income tax forms for 2012 Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Federal income tax forms for 2012 Complete lines 20 through 26 of the first column before going to line 20 of the next column. Federal income tax forms for 2012 Required installments—line 18. Federal income tax forms for 2012   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). Federal income tax forms for 2012 This method—the regular method—is the one to use if you received your income evenly throughout the year. Federal income tax forms for 2012   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Federal income tax forms for 2012 First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. Federal income tax forms for 2012 See Annualized Income Installment Method (Schedule AI), later. Federal income tax forms for 2012 Payments made—line 19. Federal income tax forms for 2012   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. Federal income tax forms for 2012 For special rules for figuring your payments, see Form 2210 instructions for line 19. Federal income tax forms for 2012   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. Federal income tax forms for 2012 If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. Federal income tax forms for 2012 Actual withholding method. Federal income tax forms for 2012    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. Federal income tax forms for 2012 You can make this choice separately for the tax withheld from your wages and for all other withholding. Federal income tax forms for 2012 This includes any excess social security and tier 1 RRTA tax withheld. Federal income tax forms for 2012   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. Federal income tax forms for 2012   If you use your actual withholding, you must check box D in Form 2210, Part II. Federal income tax forms for 2012 Then complete Form 2210 using the regular method (Part IV) and file it with your return. Federal income tax forms for 2012 Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. Federal income tax forms for 2012 The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. Federal income tax forms for 2012 For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. Federal income tax forms for 2012 A 3% rate applies to all four periods. Federal income tax forms for 2012 Payments. Federal income tax forms for 2012    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. Federal income tax forms for 2012 For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. Federal income tax forms for 2012 You can use the table in the Form 2210 instructions to make your list. Federal income tax forms for 2012 Follow those instructions for listing income tax withheld and payments made with your return. Federal income tax forms for 2012 Use the list to determine when each underpayment was paid. Federal income tax forms for 2012   If you mail your estimated tax payments, use the date of the U. Federal income tax forms for 2012 S. Federal income tax forms for 2012 postmark as the date of payment. Federal income tax forms for 2012 Line 1b. Federal income tax forms for 2012   Apply the payments listed to underpayment balance in the first column until it is fully paid. Federal income tax forms for 2012 Apply payments in the order made. Federal income tax forms for 2012 Figuring the penalty. Federal income tax forms for 2012   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. Federal income tax forms for 2012 On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. Federal income tax forms for 2012 On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. Federal income tax forms for 2012 If no payments are applied, figure the penalty on the amount on line 1a. Federal income tax forms for 2012 Aid for counting days. Federal income tax forms for 2012    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. Federal income tax forms for 2012 Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. Federal income tax forms for 2012 In the same manner, find the number for the date the payment was made. Federal income tax forms for 2012 Subtract the due date “number” from the payment date “number. Federal income tax forms for 2012 ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. Federal income tax forms for 2012 Table 4-1. Federal income tax forms for 2012 Calendar To Determine the Number of Days a Payment Is Late Instructions. Federal income tax forms for 2012 Use this table with Form 2210 if you are completing Part IV, Section B. Federal income tax forms for 2012 First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Federal income tax forms for 2012 Then, in the same manner, find the number for the date the payment was made. Federal income tax forms for 2012 Finally, subtract the due date number from the payment date number. Federal income tax forms for 2012 The result is the number of days the payment is late. Federal income tax forms for 2012 Example. Federal income tax forms for 2012 The payment due date is June 15 (61). Federal income tax forms for 2012 The payment was made on November 4 (203). Federal income tax forms for 2012 The payment is 142 days late (203 – 61). Federal income tax forms for 2012 Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. Federal income tax forms for 2012 Sept. Federal income tax forms for 2012 Oct. Federal income tax forms for 2012 Nov. Federal income tax forms for 2012 Dec. Federal income tax forms for 2012 Jan. Federal income tax forms for 2012 Feb. Federal income tax forms for 2012 Mar. Federal income tax forms for 2012 Apr. Federal income tax forms for 2012 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Federal income tax forms for 2012 Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. Federal income tax forms for 2012 To figure your underpayment using this method, complete Form 2210, Schedule AI. Federal income tax forms for 2012 Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Federal income tax forms for 2012 If you use the annualized income installment method, you must check box C in Part II of Form 2210. Federal income tax forms for 2012 Also, you must attach Form 2210 and Schedule AI to your return. Federal income tax forms for 2012 If you use Schedule AI for any payment due date, you must use it for all payment due dates. Federal income tax forms for 2012 Completing Schedule AI. Federal income tax forms for 2012   Follow the Form 2210 instructions to complete Schedule AI. Federal income tax forms for 2012 For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. Federal income tax forms for 2012 If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. Federal income tax forms for 2012 Note. Federal income tax forms for 2012 Each period includes amounts from the previous period(s). Federal income tax forms for 2012 Period (a) includes items for January 1 through March 31. Federal income tax forms for 2012 Period (b) includes items for January 1 through May 31. Federal income tax forms for 2012 Period (c) includes items for January 1 through August 31. Federal income tax forms for 2012 Period (d) includes items for the entire year. Federal income tax forms for 2012 Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. Federal income tax forms for 2012 The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. Federal income tax forms for 2012 If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. Federal income tax forms for 2012 Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. Federal income tax forms for 2012 The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. Federal income tax forms for 2012 Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . Federal income tax forms for 2012 See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. Federal income tax forms for 2012 Form 2210-F. Federal income tax forms for 2012   Use Form 2210-F to figure any underpayment penalty. Federal income tax forms for 2012 Do not attach it to your return unless you check a box in Part I. Federal income tax forms for 2012 However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. Federal income tax forms for 2012 Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. Federal income tax forms for 2012 Keep your filled-in Form 2210-F for your records. Federal income tax forms for 2012    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. Federal income tax forms for 2012 Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. Federal income tax forms for 2012 You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. Federal income tax forms for 2012 You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. Federal income tax forms for 2012 You had a reasonable cause for not making the payment. Federal income tax forms for 2012 Your underpayment was not due to willful neglect. Federal income tax forms for 2012 How to request a waiver. Federal income tax forms for 2012   To request a waiver, see the Instructions for Form 2210. Federal income tax forms for 2012 Farmers and fishermen. Federal income tax forms for 2012   To request a waiver, see the Instructions for Form 2210-F. Federal income tax forms for 2012 Federally declared disaster. Federal income tax forms for 2012   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. Federal income tax forms for 2012 During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. Federal income tax forms for 2012 Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. Federal income tax forms for 2012 If you still owe a penalty after the automatic waiver is applied, we will send you a bill. Federal income tax forms for 2012   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Federal income tax forms for 2012 Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. Federal income tax forms for 2012 If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. Federal income tax forms for 2012   Details on the applicable disaster postponement period can be found at IRS. Federal income tax forms for 2012 gov. Federal income tax forms for 2012 Enter Tax Relief in Disaster Situations. Federal income tax forms for 2012 Select the federally declared disaster that affected you. Federal income tax forms for 2012    Worksheet 4-1. Federal income tax forms for 2012 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. Federal income tax forms for 2012 To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. Federal income tax forms for 2012                   1. Federal income tax forms for 2012 Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. Federal income tax forms for 2012       2. Federal income tax forms for 2012 Enter your annualized qualified dividends for the period 2. Federal income tax forms for 2012           3. Federal income tax forms for 2012 Are you filing Schedule D?               □ Yes. Federal income tax forms for 2012 Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. Federal income tax forms for 2012 If either line 15 or line 16 is blank or a loss, enter -0-. Federal income tax forms for 2012 3. Federal income tax forms for 2012             □ No. Federal income tax forms for 2012 Enter your annualized capital gain distributions from Form 1040, line 13             4. Federal income tax forms for 2012 Add lines 2 and 3   4. Federal income tax forms for 2012           5. Federal income tax forms for 2012 If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Federal income tax forms for 2012 Otherwise, enter -0-   5. Federal income tax forms for 2012           6. Federal income tax forms for 2012 Subtract line 5 from line 4. Federal income tax forms for 2012 If zero or less, enter -0- 6. Federal income tax forms for 2012       7. Federal income tax forms for 2012 Subtract line 6 from line 1. Federal income tax forms for 2012 If zero or less, enter -0- 7. Federal income tax forms for 2012       8. Federal income tax forms for 2012 Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. Federal income tax forms for 2012 8. Federal income tax forms for 2012       9. Federal income tax forms for 2012 Enter the smaller of line 1 or line 8 9. Federal income tax forms for 2012       10. Federal income tax forms for 2012 Enter the smaller of line 7 or line 9 10. Federal income tax forms for 2012       11. Federal income tax forms for 2012 Subtract line 10 from line 9. Federal income tax forms for 2012 This amount is taxed at 0% 11. Federal income tax forms for 2012       12. Federal income tax forms for 2012 Enter the smaller of line 1 or line 6 12. Federal income tax forms for 2012       13. Federal income tax forms for 2012 Enter the amount from line 11 13. Federal income tax forms for 2012       14. Federal income tax forms for 2012 Subtract line 13 from line 12 14. Federal income tax forms for 2012       15. Federal income tax forms for 2012 Multiply line 14 by 15% (. Federal income tax forms for 2012 15) 15. Federal income tax forms for 2012   16. Federal income tax forms for 2012 Figure the tax on the amount on line 7. Federal income tax forms for 2012 If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Federal income tax forms for 2012 If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. Federal income tax forms for 2012   17. Federal income tax forms for 2012 Add lines 15 and 16 17. Federal income tax forms for 2012   18. Federal income tax forms for 2012 Figure the tax on the amount on line 1. Federal income tax forms for 2012 If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Federal income tax forms for 2012 If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. Federal income tax forms for 2012   19. Federal income tax forms for 2012 Tax on all taxable income. Federal income tax forms for 2012 Enter the smaller of line 17 or line 18. Federal income tax forms for 2012 Also enter this amount on line 12 of Schedule AI in the appropriate column. Federal income tax forms for 2012 However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. Federal income tax forms for 2012   Worksheet 4-2. Federal income tax forms for 2012 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. Federal income tax forms for 2012             1. Federal income tax forms for 2012 Enter the amount from line 11 of Schedule AI for the period 1. Federal income tax forms for 2012   2. Federal income tax forms for 2012 Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. Federal income tax forms for 2012   3. Federal income tax forms for 2012 Add lines 1 and 2 3. Federal income tax forms for 2012   4. Federal income tax forms for 2012 Tax on the amount on line 3. Federal income tax forms for 2012 Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. Federal income tax forms for 2012 See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. Federal income tax forms for 2012 (Note. Federal income tax forms for 2012 You do not have to use the same method for each period on Schedule AI. Federal income tax forms for 2012 ) 4. Federal income tax forms for 2012   5. Federal income tax forms for 2012 Tax on the amount on line 2. Federal income tax forms for 2012 If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Federal income tax forms for 2012 If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. Federal income tax forms for 2012   6. Federal income tax forms for 2012 Subtract line 5 from line 4. Federal income tax forms for 2012 Enter the result here and on line 12 of Schedule AI. Federal income tax forms for 2012 If zero or less,  enter -0- 6. Federal income tax forms for 2012             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. Federal income tax forms for 2012     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. Federal income tax forms for 2012 If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Federal income tax forms for 2012 Complete the rest of Form 8615 according to its instructions. Federal income tax forms for 2012 Then complete lines 5 and 6 above. Federal income tax forms for 2012     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Federal income tax forms for 2012 Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Federal income tax forms for 2012 Next, determine if you have a capital gain excess. Federal income tax forms for 2012     Figuring capital gain excess. Federal income tax forms for 2012 To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). Federal income tax forms for 2012 If the result is more than zero, that amount is your capital gain excess. Federal income tax forms for 2012     No capital gain excess. Federal income tax forms for 2012 If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Federal income tax forms for 2012 Then complete lines 5 and 6 above. Federal income tax forms for 2012     Capital gain excess. Federal income tax forms for 2012 If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Federal income tax forms for 2012 Then complete lines 5 and 6 above. Federal income tax forms for 2012     Make the modifications below only for purposes of filling out Worksheet 4-2 above. Federal income tax forms for 2012     a. Federal income tax forms for 2012 Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. Federal income tax forms for 2012     b. Federal income tax forms for 2012 Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. Federal income tax forms for 2012     c. Federal income tax forms for 2012 Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. Federal income tax forms for 2012     d. Federal income tax forms for 2012 Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). Federal income tax forms for 2012   Prev  Up  Next   Home   More Online Publications