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File 2012 taxes for free 1. File 2012 taxes for free   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. File 2012 taxes for free Business associate. File 2012 taxes for free Bona fide business purpose. File 2012 taxes for free Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. File 2012 taxes for free This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. File 2012 taxes for free It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. File 2012 taxes for free Travel expenses defined. File 2012 taxes for free   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. File 2012 taxes for free   An ordinary expense is one that is common and accepted in your trade or business. File 2012 taxes for free A necessary expense is one that is helpful and appropriate for your business. File 2012 taxes for free An expense does not have to be required to be considered necessary. File 2012 taxes for free   You will find examples of deductible travel expenses in Table 1-1 , later. File 2012 taxes for free Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. File 2012 taxes for free This rest requirement is not satisfied by merely napping in your car. File 2012 taxes for free You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. File 2012 taxes for free Example 1. File 2012 taxes for free You are a railroad conductor. File 2012 taxes for free You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. File 2012 taxes for free During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. File 2012 taxes for free You are considered to be away from home. File 2012 taxes for free Example 2. File 2012 taxes for free You are a truck driver. File 2012 taxes for free You leave your terminal and return to it later the same day. File 2012 taxes for free You get an hour off at your turnaround point to eat. File 2012 taxes for free Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. File 2012 taxes for free Members of the Armed Forces. File 2012 taxes for free   If you are a member of the U. File 2012 taxes for free S. File 2012 taxes for free Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. File 2012 taxes for free You cannot deduct your expenses for meals and lodging. File 2012 taxes for free You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. File 2012 taxes for free If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. File 2012 taxes for free   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. File 2012 taxes for free Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. File 2012 taxes for free Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. File 2012 taxes for free It includes the entire city or general area in which your business or work is located. File 2012 taxes for free If you have more than one regular place of business, your tax home is your main place of business. File 2012 taxes for free See Main place of business or work , later. File 2012 taxes for free If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. File 2012 taxes for free See No main place of business or work , later. File 2012 taxes for free If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. File 2012 taxes for free As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. File 2012 taxes for free Main place of business or work. File 2012 taxes for free   If you have more than one place of work, consider the following when determining which one is your main place of business or work. File 2012 taxes for free The total time you ordinarily spend in each place. File 2012 taxes for free The level of your business activity in each place. File 2012 taxes for free Whether your income from each place is significant or insignificant. File 2012 taxes for free Example. File 2012 taxes for free You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. File 2012 taxes for free You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. File 2012 taxes for free Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. File 2012 taxes for free No main place of business or work. File 2012 taxes for free   You may have a tax home even if you do not have a regular or main place of work. File 2012 taxes for free Your tax home may be the home where you regularly live. File 2012 taxes for free Factors used to determine tax home. File 2012 taxes for free   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. File 2012 taxes for free You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. File 2012 taxes for free You have living expenses at your main home that you duplicate because your business requires you to be away from that home. File 2012 taxes for free You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. File 2012 taxes for free   If you satisfy all three factors, your tax home is the home where you regularly live. File 2012 taxes for free If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. File 2012 taxes for free If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. File 2012 taxes for free Example 1. File 2012 taxes for free You are single and live in Boston in an apartment you rent. File 2012 taxes for free You have worked for your employer in Boston for a number of years. File 2012 taxes for free Your employer enrolls you in a 12-month executive training program. File 2012 taxes for free You do not expect to return to work in Boston after you complete your training. File 2012 taxes for free During your training, you do not do any work in Boston. File 2012 taxes for free Instead, you receive classroom and on-the-job training throughout the United States. File 2012 taxes for free You keep your apartment in Boston and return to it frequently. File 2012 taxes for free You use your apartment to conduct your personal business. File 2012 taxes for free You also keep up your community contacts in Boston. File 2012 taxes for free When you complete your training, you are transferred to Los Angeles. File 2012 taxes for free You do not satisfy factor (1) because you did not work in Boston. File 2012 taxes for free You satisfy factor (2) because you had duplicate living expenses. File 2012 taxes for free You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. File 2012 taxes for free Therefore, you have a tax home in Boston. File 2012 taxes for free Example 2. File 2012 taxes for free You are an outside salesperson with a sales territory covering several states. File 2012 taxes for free Your employer's main office is in Newark, but you do not conduct any business there. File 2012 taxes for free Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. File 2012 taxes for free You have a room in your married sister's house in Dayton. File 2012 taxes for free You stay there for one or two weekends a year, but you do no work in the area. File 2012 taxes for free You do not pay your sister for the use of the room. File 2012 taxes for free You do not satisfy any of the three factors listed earlier. File 2012 taxes for free You are an itinerant and have no tax home. File 2012 taxes for free Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. File 2012 taxes for free You also cannot deduct the cost of meals and lodging while at your tax home. File 2012 taxes for free See Example 1 , later. File 2012 taxes for free If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. File 2012 taxes for free See Example 2 , later. File 2012 taxes for free Example 1. File 2012 taxes for free You are a truck driver and you and your family live in Tucson. File 2012 taxes for free You are employed by a trucking firm that has its terminal in Phoenix. File 2012 taxes for free At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. File 2012 taxes for free You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. File 2012 taxes for free This is because Phoenix is your tax home. File 2012 taxes for free Example 2. File 2012 taxes for free Your family home is in Pittsburgh, where you work 12 weeks a year. File 2012 taxes for free The rest of the year you work for the same employer in Baltimore. File 2012 taxes for free In Baltimore, you eat in restaurants and sleep in a rooming house. File 2012 taxes for free Your salary is the same whether you are in Pittsburgh or Baltimore. File 2012 taxes for free Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. File 2012 taxes for free You cannot deduct any expenses you have for meals and lodging there. File 2012 taxes for free However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. File 2012 taxes for free You can deduct the cost of your round trip between Baltimore and Pittsburgh. File 2012 taxes for free You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. File 2012 taxes for free Temporary Assignment or Job You may regularly work at your tax home and also work at another location. File 2012 taxes for free It may not be practical to return to your tax home from this other location at the end of each work day. File 2012 taxes for free Temporary assignment vs. File 2012 taxes for free indefinite assignment. File 2012 taxes for free   If your assignment or job away from your main place of work is temporary, your tax home does not change. File 2012 taxes for free You are considered to be away from home for the whole period you are away from your main place of work. File 2012 taxes for free You can deduct your travel expenses if they otherwise qualify for deduction. File 2012 taxes for free Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. File 2012 taxes for free    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. File 2012 taxes for free An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. File 2012 taxes for free   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. File 2012 taxes for free You may be able to deduct the cost of relocating to your new tax home as a moving expense. File 2012 taxes for free See Publication 521 for more information. File 2012 taxes for free Exception for federal crime investigations or prosecutions. File 2012 taxes for free   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. File 2012 taxes for free This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. File 2012 taxes for free   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. File 2012 taxes for free Determining temporary or indefinite. File 2012 taxes for free   You must determine whether your assignment is temporary or indefinite when you start work. File 2012 taxes for free If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. File 2012 taxes for free An assignment or job that is initially temporary may become indefinite due to changed circumstances. File 2012 taxes for free A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. File 2012 taxes for free   The following examples illustrate whether an assignment or job is temporary or indefinite. File 2012 taxes for free Example 1. File 2012 taxes for free You are a construction worker. File 2012 taxes for free You live and regularly work in Los Angeles. File 2012 taxes for free You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. File 2012 taxes for free Your tax home is Los Angeles. File 2012 taxes for free Because of a shortage of work, you took a job on a construction project in Fresno. File 2012 taxes for free Your job was scheduled to end in 8 months. File 2012 taxes for free The job actually lasted 10 months. File 2012 taxes for free You realistically expected the job in Fresno to last 8 months. File 2012 taxes for free The job actually did last less than 1 year. File 2012 taxes for free The job is temporary and your tax home is still in Los Angeles. File 2012 taxes for free Example 2. File 2012 taxes for free The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. File 2012 taxes for free The job actually was completed in 10 months. File 2012 taxes for free Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. File 2012 taxes for free You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. File 2012 taxes for free Example 3. File 2012 taxes for free The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. File 2012 taxes for free After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). File 2012 taxes for free Initially, you realistically expected the job in Fresno to last for only 9 months. File 2012 taxes for free However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. File 2012 taxes for free You can only deduct your travel expenses for the first 8 months. File 2012 taxes for free You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. File 2012 taxes for free Going home on days off. File 2012 taxes for free   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. File 2012 taxes for free You cannot deduct the cost of your meals and lodging there. File 2012 taxes for free However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. File 2012 taxes for free You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. File 2012 taxes for free   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. File 2012 taxes for free In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. File 2012 taxes for free Probationary work period. File 2012 taxes for free   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. File 2012 taxes for free You cannot deduct any of your expenses for meals and lodging during the probationary period. File 2012 taxes for free What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. File 2012 taxes for free You can deduct ordinary and necessary expenses you have when you travel away from home on business. File 2012 taxes for free The type of expense you can deduct depends on the facts and your circumstances. File 2012 taxes for free Table 1-1 summarizes travel expenses you may be able to deduct. File 2012 taxes for free You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. File 2012 taxes for free When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. File 2012 taxes for free You can use a log, diary, notebook, or any other written record to keep track of your expenses. File 2012 taxes for free The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). File 2012 taxes for free Separating costs. File 2012 taxes for free   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. File 2012 taxes for free You must have a reasonable basis for making this allocation. File 2012 taxes for free For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. File 2012 taxes for free Travel expenses for another individual. File 2012 taxes for free    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. File 2012 taxes for free Employee. File 2012 taxes for free   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. File 2012 taxes for free Business associate. File 2012 taxes for free   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. File 2012 taxes for free A business associate is someone with whom you could reasonably expect to actively conduct business. File 2012 taxes for free A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. File 2012 taxes for free Bona fide business purpose. File 2012 taxes for free   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. File 2012 taxes for free Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. File 2012 taxes for free Table 1-1. File 2012 taxes for free Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. File 2012 taxes for free IF you have expenses for. File 2012 taxes for free . File 2012 taxes for free . File 2012 taxes for free THEN you can deduct the cost of. File 2012 taxes for free . File 2012 taxes for free . File 2012 taxes for free transportation travel by airplane, train, bus, or car between your home and your business destination. File 2012 taxes for free If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. File 2012 taxes for free If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. File 2012 taxes for free taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. File 2012 taxes for free baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. File 2012 taxes for free car operating and maintaining your car when traveling away from home on business. File 2012 taxes for free You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. File 2012 taxes for free If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. File 2012 taxes for free lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. File 2012 taxes for free Meals include amounts spent for food, beverages, taxes, and related tips. File 2012 taxes for free See Meals for additional rules and limits. File 2012 taxes for free cleaning dry cleaning and laundry. File 2012 taxes for free telephone business calls while on your business trip. File 2012 taxes for free This includes business communication by fax machine or other communication devices. File 2012 taxes for free tips tips you pay for any expenses in this chart. File 2012 taxes for free other other similar ordinary and necessary expenses related to your business travel. File 2012 taxes for free These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. File 2012 taxes for free Example. File 2012 taxes for free Jerry drives to Chicago on business and takes his wife, Linda, with him. File 2012 taxes for free Linda is not Jerry's employee. File 2012 taxes for free Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. File 2012 taxes for free The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. File 2012 taxes for free Her expenses are not deductible. File 2012 taxes for free Jerry pays $199 a day for a double room. File 2012 taxes for free A single room costs $149 a day. File 2012 taxes for free He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. File 2012 taxes for free If he uses public transportation, he can deduct only his fare. File 2012 taxes for free Meals You can deduct the cost of meals in either of the following situations. File 2012 taxes for free It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. File 2012 taxes for free The meal is business-related entertainment. File 2012 taxes for free Business-related entertainment is discussed in chapter 2 . File 2012 taxes for free The following discussion deals only with meals that are not business-related entertainment. File 2012 taxes for free Lavish or extravagant. File 2012 taxes for free   You cannot deduct expenses for meals that are lavish or extravagant. File 2012 taxes for free An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. File 2012 taxes for free Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. File 2012 taxes for free 50% limit on meals. File 2012 taxes for free   You can figure your meals expense using either of the following methods. File 2012 taxes for free Actual cost. File 2012 taxes for free The standard meal allowance. File 2012 taxes for free Both of these methods are explained below. File 2012 taxes for free But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. File 2012 taxes for free   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. File 2012 taxes for free If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. File 2012 taxes for free Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. File 2012 taxes for free Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. File 2012 taxes for free If you use this method, you must keep records of your actual cost. File 2012 taxes for free Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. File 2012 taxes for free It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. File 2012 taxes for free The set amount varies depending on where and when you travel. File 2012 taxes for free In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . File 2012 taxes for free If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. File 2012 taxes for free See the recordkeeping rules for travel in chapter 5 . File 2012 taxes for free Incidental expenses. File 2012 taxes for free   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. File 2012 taxes for free   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. File 2012 taxes for free Incidental-expenses-only method. File 2012 taxes for free   You can use an optional method (instead of actual cost) for deducting incidental expenses only. File 2012 taxes for free The amount of the deduction is $5 a day. File 2012 taxes for free You can use this method only if you did not pay or incur any meal expenses. File 2012 taxes for free You cannot use this method on any day that you use the standard meal allowance. File 2012 taxes for free This method is subject to the proration rules for partial days. File 2012 taxes for free See Travel for days you depart and return , later in this chapter. File 2012 taxes for free Note. File 2012 taxes for free The incidental-expenses-only method is not subject to the 50% limit discussed below. File 2012 taxes for free Federal employees should refer to the Federal Travel Regulations at www. File 2012 taxes for free gsa. File 2012 taxes for free gov. File 2012 taxes for free Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. File 2012 taxes for free 50% limit may apply. File 2012 taxes for free   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. File 2012 taxes for free If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. File 2012 taxes for free The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. File 2012 taxes for free There is no optional standard lodging amount similar to the standard meal allowance. File 2012 taxes for free Your allowable lodging expense deduction is your actual cost. File 2012 taxes for free Who can use the standard meal allowance. File 2012 taxes for free   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. File 2012 taxes for free Use of the standard meal allowance for other travel. File 2012 taxes for free   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. File 2012 taxes for free You can also use it to figure your meal expenses when you travel for qualifying educational purposes. File 2012 taxes for free You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. File 2012 taxes for free Amount of standard meal allowance. File 2012 taxes for free   The standard meal allowance is the federal M&IE rate. File 2012 taxes for free For travel in 2013, the rate for most small localities in the United States is $46 a day. File 2012 taxes for free    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. File 2012 taxes for free    You can find this information (organized by state) on the Internet at www. File 2012 taxes for free gsa. File 2012 taxes for free gov/perdiem. File 2012 taxes for free Enter a zip code or select a city and state for the per diem rates for the current fiscal year. File 2012 taxes for free Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. File 2012 taxes for free ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. File 2012 taxes for free You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. File 2012 taxes for free   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. File 2012 taxes for free If you work in the transportation industry, however, see Special rate for transportation workers , later. File 2012 taxes for free Standard meal allowance for areas outside the continental United States. File 2012 taxes for free   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. File 2012 taxes for free The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. File 2012 taxes for free S. File 2012 taxes for free Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. File 2012 taxes for free The Department of State establishes per diem rates for all other foreign areas. File 2012 taxes for free    You can access per diem rates for non-foreign areas outside the continental United States at: www. File 2012 taxes for free defensetravel. File 2012 taxes for free dod. File 2012 taxes for free mil/site/perdiemCalc. File 2012 taxes for free cfm. File 2012 taxes for free You can access all other foreign per diem rates at: www. File 2012 taxes for free state. File 2012 taxes for free gov/travel/. File 2012 taxes for free Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. File 2012 taxes for free Special rate for transportation workers. File 2012 taxes for free   You can use a special standard meal allowance if you work in the transportation industry. File 2012 taxes for free You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. File 2012 taxes for free If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). File 2012 taxes for free   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. File 2012 taxes for free If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. File 2012 taxes for free Travel for days you depart and return. File 2012 taxes for free   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). File 2012 taxes for free You can do so by one of two methods. File 2012 taxes for free Method 1: You can claim 3/4 of the standard meal allowance. File 2012 taxes for free Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. File 2012 taxes for free Example. File 2012 taxes for free Jen is employed in New Orleans as a convention planner. File 2012 taxes for free In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. File 2012 taxes for free She left her home in New Orleans at 10 a. File 2012 taxes for free m. File 2012 taxes for free on Wednesday and arrived in Washington, DC, at 5:30 p. File 2012 taxes for free m. File 2012 taxes for free After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. File 2012 taxes for free m. File 2012 taxes for free Jen's employer gave her a flat amount to cover her expenses and included it with her wages. File 2012 taxes for free Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. File 2012 taxes for free Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. File 2012 taxes for free For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. File 2012 taxes for free Travel in the United States The following discussion applies to travel in the United States. File 2012 taxes for free For this purpose, the United States includes the 50 states and the District of Columbia. File 2012 taxes for free The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. File 2012 taxes for free See Part of Trip Outside the United States , later. File 2012 taxes for free Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. File 2012 taxes for free If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. File 2012 taxes for free These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. File 2012 taxes for free Example. File 2012 taxes for free You work in Atlanta and take a business trip to New Orleans in May. File 2012 taxes for free Your business travel totals 850 miles round trip. File 2012 taxes for free On your way, you stop in Mobile to visit your parents. File 2012 taxes for free You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. File 2012 taxes for free If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. File 2012 taxes for free You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. File 2012 taxes for free The deduction for your meals is subject to the 50% limit on meals mentioned earlier. File 2012 taxes for free Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. File 2012 taxes for free However, you can deduct any expenses you have while at your destination that are directly related to your business. File 2012 taxes for free A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. File 2012 taxes for free The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. File 2012 taxes for free Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. File 2012 taxes for free For the part of your trip that is inside the United States, use the rules for travel in the United States. File 2012 taxes for free Travel outside the United States does not include travel from one point in the United States to another point in the United States. File 2012 taxes for free The following discussion can help you determine whether your trip was entirely within the United States. File 2012 taxes for free Public transportation. File 2012 taxes for free   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. File 2012 taxes for free Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . File 2012 taxes for free Example. File 2012 taxes for free You fly from New York to Puerto Rico with a scheduled stop in Miami. File 2012 taxes for free You return to New York nonstop. File 2012 taxes for free The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. File 2012 taxes for free Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. File 2012 taxes for free Private car. File 2012 taxes for free   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. File 2012 taxes for free Example. File 2012 taxes for free You travel by car from Denver to Mexico City and return. File 2012 taxes for free Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. File 2012 taxes for free The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. File 2012 taxes for free Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. File 2012 taxes for free For this purpose, the United States includes the 50 states and the District of Columbia. File 2012 taxes for free How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. File 2012 taxes for free Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. File 2012 taxes for free Travel entirely for business. File 2012 taxes for free   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. File 2012 taxes for free Travel considered entirely for business. File 2012 taxes for free   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. File 2012 taxes for free Exception 1 - No substantial control. File 2012 taxes for free   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. File 2012 taxes for free The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. File 2012 taxes for free   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. File 2012 taxes for free    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . File 2012 taxes for free   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. File 2012 taxes for free   A self-employed person generally has substantial control over arranging business trips. File 2012 taxes for free Exception 2 - Outside United States no more than a week. File 2012 taxes for free   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. File 2012 taxes for free One week means 7 consecutive days. File 2012 taxes for free In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. File 2012 taxes for free Example. File 2012 taxes for free You traveled to Brussels primarily for business. File 2012 taxes for free You left Denver on Tuesday and flew to New York. File 2012 taxes for free On Wednesday, you flew from New York to Brussels, arriving the next morning. File 2012 taxes for free On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. File 2012 taxes for free You flew back to New York, arriving Wednesday afternoon. File 2012 taxes for free On Thursday, you flew back to Denver. File 2012 taxes for free Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. File 2012 taxes for free This is because the day you depart does not count as a day outside the United States. File 2012 taxes for free You can deduct your cost of the round-trip flight between Denver and Brussels. File 2012 taxes for free You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. File 2012 taxes for free However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. File 2012 taxes for free Exception 3 - Less than 25% of time on personal activities. File 2012 taxes for free   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. File 2012 taxes for free For this purpose, count both the day your trip began and the day it ended. File 2012 taxes for free Example. File 2012 taxes for free You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. File 2012 taxes for free You then flew back to Seattle. File 2012 taxes for free You spent 1 day flying in each direction. File 2012 taxes for free Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. File 2012 taxes for free The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. File 2012 taxes for free Exception 4 - Vacation not a major consideration. File 2012 taxes for free   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. File 2012 taxes for free Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. File 2012 taxes for free You can only deduct the business portion of your cost of getting to and from your destination. File 2012 taxes for free You must allocate the costs between your business and other activities to determine your deductible amount. File 2012 taxes for free See Travel allocation rules , later. File 2012 taxes for free You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . File 2012 taxes for free In those cases, you can deduct the total cost of getting to and from your destination. File 2012 taxes for free Travel allocation rules. File 2012 taxes for free   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. File 2012 taxes for free The days you depart from and return to the United States are both counted as days outside the United States. File 2012 taxes for free   To figure the deductible amount of your round-trip travel expenses, use the following fraction. File 2012 taxes for free The numerator (top number) is the total number of business days outside the United States. File 2012 taxes for free The denominator (bottom number) is the total number of business and nonbusiness days of travel. File 2012 taxes for free Counting business days. File 2012 taxes for free   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. File 2012 taxes for free Transportation day. File 2012 taxes for free   Count as a business day any day you spend traveling to or from a business destination. File 2012 taxes for free However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. File 2012 taxes for free Extra days for side trips or nonbusiness activities cannot be counted as business days. File 2012 taxes for free Presence required. File 2012 taxes for free   Count as a business day any day your presence is required at a particular place for a specific business purpose. File 2012 taxes for free Count it as a business day even if you spend most of the day on nonbusiness activities. File 2012 taxes for free Day spent on business. File 2012 taxes for free   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. File 2012 taxes for free Also, count as a business day any day you are prevented from working because of circumstances beyond your control. File 2012 taxes for free Certain weekends and holidays. File 2012 taxes for free   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. File 2012 taxes for free But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. File 2012 taxes for free Example 1. File 2012 taxes for free Your tax home is New York City. File 2012 taxes for free You travel to Quebec, where you have a business appointment on Friday. File 2012 taxes for free You have another appointment on the following Monday. File 2012 taxes for free Because your presence was required on both Friday and Monday, they are business days. File 2012 taxes for free Because the weekend is between business days, Saturday and Sunday are counted as business days. File 2012 taxes for free This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. File 2012 taxes for free Example 2. File 2012 taxes for free If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. File 2012 taxes for free Nonbusiness activity on the way to or from your business destination. File 2012 taxes for free   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. File 2012 taxes for free   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. File 2012 taxes for free   You determine the nonbusiness portion of that expense by multiplying it by a fraction. File 2012 taxes for free The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. File 2012 taxes for free Example. File 2012 taxes for free You live in New York. File 2012 taxes for free On May 4 you flew to Paris to attend a business conference that began on May 5. File 2012 taxes for free The conference ended at noon on May 14. File 2012 taxes for free That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. File 2012 taxes for free The primary purpose for the trip was to attend the conference. File 2012 taxes for free If you had not stopped in Dublin, you would have arrived home the evening of May 14. File 2012 taxes for free You do not meet any of the exceptions that would allow you to consider your travel entirely for business. File 2012 taxes for free May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. File 2012 taxes for free You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. File 2012 taxes for free You cannot deduct your expenses while in Dublin. File 2012 taxes for free You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. File 2012 taxes for free You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. File 2012 taxes for free Round-trip airfare from New York to Dublin would have been $1,250. File 2012 taxes for free You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). File 2012 taxes for free Your deductible air travel expense is $1,364 ($1,850 − $486). File 2012 taxes for free Nonbusiness activity at, near, or beyond business destination. File 2012 taxes for free   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. File 2012 taxes for free   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. File 2012 taxes for free   You determine the nonbusiness portion of that expense by multiplying it by a fraction. File 2012 taxes for free The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. File 2012 taxes for free   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. File 2012 taxes for free Example. File 2012 taxes for free Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. File 2012 taxes for free You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. File 2012 taxes for free In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. File 2012 taxes for free You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. File 2012 taxes for free (Assume these expenses total $4,939. File 2012 taxes for free ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. File 2012 taxes for free Other methods. File 2012 taxes for free   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. File 2012 taxes for free Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. File 2012 taxes for free However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. File 2012 taxes for free Example. File 2012 taxes for free The university from which you graduated has a continuing education program for members of its alumni association. File 2012 taxes for free This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. File 2012 taxes for free However, none of the conferences are directed toward specific occupations or professions. File 2012 taxes for free It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. File 2012 taxes for free Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. File 2012 taxes for free These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. File 2012 taxes for free Professional conference directors schedule and conduct the sessions. File 2012 taxes for free Participants can choose those sessions they wish to attend. File 2012 taxes for free You can participate in this program since you are a member of the alumni association. File 2012 taxes for free You and your family take one of the trips. File 2012 taxes for free You spend about 2 hours at each of the planned sessions. File 2012 taxes for free The rest of the time you go touring and sightseeing with your family. File 2012 taxes for free The trip lasts less than 1 week. File 2012 taxes for free Your travel expenses for the trip are not deductible since the trip was primarily a vacation. File 2012 taxes for free However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. File 2012 taxes for free These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. File 2012 taxes for free Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. File 2012 taxes for free The limit is twice the highest federal per diem rate allowable at the time of your travel. File 2012 taxes for free (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. File 2012 taxes for free ) Daily limit on luxury water travel. File 2012 taxes for free   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. File 2012 taxes for free   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. File 2012 taxes for free 1 – Mar. File 2012 taxes for free 31 $367 $734   Apr. File 2012 taxes for free 1 – June 30 312 624   July 1 – Aug. File 2012 taxes for free 31 310 620   Sept. File 2012 taxes for free 1 – Sept. File 2012 taxes for free 30 366 732   Oct. File 2012 taxes for free 1 – Dec. File 2012 taxes for free 31 374 748 Example. File 2012 taxes for free Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. File 2012 taxes for free Her expense for the 6-day cruise was $5,200. File 2012 taxes for free Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). File 2012 taxes for free Meals and entertainment. File 2012 taxes for free   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. File 2012 taxes for free For a discussion of the 50% Limit , see chapter 2. File 2012 taxes for free Example. File 2012 taxes for free In the previous example, Caroline's luxury water travel had a total cost of $5,200. File 2012 taxes for free Of that amount, $3,700 was separately stated as meals and entertainment. File 2012 taxes for free Caroline, who is self-employed, is not reimbursed for any of her travel expenses. File 2012 taxes for free Caroline figures her deductible travel expenses as follows. File 2012 taxes for free Meals and entertainment $3,700   50% limit × . File 2012 taxes for free 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. File 2012 taxes for free Not separately stated. File 2012 taxes for free   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. File 2012 taxes for free Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. File 2012 taxes for free See Cruise Ships under Conventions. File 2012 taxes for free Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. File 2012 taxes for free You cannot deduct the travel expenses for your family. File 2012 taxes for free If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. File 2012 taxes for free Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. File 2012 taxes for free You can deduct your travel expenses only if your attendance is connected to your own trade or business. File 2012 taxes for free Convention agenda. File 2012 taxes for free   The convention agenda or program generally shows the purpose of the convention. File 2012 taxes for free You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. File 2012 taxes for free The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. File 2012 taxes for free Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. File 2012 taxes for free See Reasonableness test , later. File 2012 taxes for free If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . File 2012 taxes for free North American area. File 2012 taxes for free   The North American area includes the following locations. File 2012 taxes for free American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. File 2012 taxes for free S. File 2012 taxes for free Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. File 2012 taxes for free S. File 2012 taxes for free islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. File 2012 taxes for free Reasonableness test. File 2012 taxes for free   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. File 2012 taxes for free The purpose of the meeting and the activities taking place at the meeting. File 2012 taxes for free The purposes and activities of the sponsoring organizations or groups. File 2012 taxes for free The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. File 2012 taxes for free Other relevant factors you may present. File 2012 taxes for free Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. File 2012 taxes for free All ships that sail are considered cruise ships. File 2012 taxes for free You can deduct these expenses only if all of the following requirements are met. File 2012 taxes for free The convention, seminar, or meeting is directly related to your trade or business. File 2012 taxes for free The cruise ship is a vessel registered in the United States. File 2012 taxes for free All of the cruise ship's ports of call are in the United States or in possessions of the United States. File 2012 taxes for free You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. File 2012 taxes for free You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. File 2012 taxes for free Prev  Up  Next   Home   More Online Publications
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The File 2012 Taxes For Free

File 2012 taxes for free 1. File 2012 taxes for free   Application, Approval, and Appeal Procedures Table of Contents Introduction Topics - This chapter discusses: Application ProceduresForms Required Required Inclusions Miscellaneous Procedures Rulings and Determination LettersEffective Date of Exemption Revocation or Modification of Exemption Appeal ProceduresAppeals Office Consideration EO Technical Consideration Administrative Remedies Appeal to Courts Group Exemption LetterCentral Organization Application Procedure Keeping the Group Exemption Letter in Force Events Causing Loss of Group Exemption Introduction If your organization is one of the organizations described in this publication and is seeking recognition of tax-exempt status from the IRS, you should follow the procedures described in this chapter and the instructions that accompany the appropriate application forms. File 2012 taxes for free For information on section 501(c)(3) organizations, go to Section 501(c)(3) Organizations chapter 3. File 2012 taxes for free If your organization is seeking exemption under one of the other paragraphs of section 501(c), see chapter 4. File 2012 taxes for free Topics - This chapter discusses: Application procedures that generally apply to all organizations discussed in this publication, including the application forms; Rulings and determination letters (approvals/disapprovals); Appeal procedures available if an adverse determination letter is proposed; and Group exemption letters. File 2012 taxes for free Application Procedures Oral requests for recognition of exemption will not be considered by the IRS. File 2012 taxes for free Your application for tax-exempt status must be in writing using the appropriate forms as discussed below. File 2012 taxes for free Forms Required If your organization is seeking recognition of exemption from federal income tax, it must use a specific application prescribed by the IRS in Revenue Procedure 2013–9, sec. File 2012 taxes for free 3. File 2012 taxes for free If your organization is a central organization with exempt status, see Group Exemption Letter , later. File 2012 taxes for free All applications must be signed by an authorized individual. File 2012 taxes for free Form 1023, Application for Recognition of Exemption. File 2012 taxes for free   File Form 1023 if you are seeking recognition of exemption under section: 501(c)(3) Corporations, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports, or prevention of cruelty for children or animals, 501(e) Cooperative hospital service organization, 501(f) Cooperative service organization of operating educational organizations, 501(k) Certain organizations providing child care, 501(n) Charitable risk pools, and 501(q) Credit counseling organizations. File 2012 taxes for free Form 1024, Application for Recognition of Exemption Under Section 501(a). File 2012 taxes for free    File Form 1024 if you are seeking recognition of exemption under section: 501(c)(2) Title holding corporations, 501(c)(4) Civic leagues, social welfare organizations, 501(c)(5) Labor, agricultural, or horticultural organizations, 501(c)(6) Business leagues, chambers of commerce, etc. File 2012 taxes for free , 501(c)(7) Social clubs, 501(c)(8) Fraternal beneficiary societies, orders, or associations, 501(c)(9) Voluntary employees’ beneficiary associations, 501(c)(10) Domestic fraternal societies, orders, etc. File 2012 taxes for free , 501(c)(12) Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, 501(c)(13) Cemetery companies, 501(c)(15) Mutual insurance companies or associations, 501(c)(17) Trusts providing for the payment of supplemental unemployment compensation benefits, 501(c)(19) A post, organization, auxiliary unit, etc. File 2012 taxes for free of past or present members of the Armed Forces of the United States, and 501(c)(25) Title holding corporations or trusts. File 2012 taxes for free  Form 8718, User Fee for Exempt Organization Determination Letter Request, must also be sent along with Form 1024. File 2012 taxes for free Letter application. File 2012 taxes for free   If your organization is seeking recognition of exemption under section 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), or (29), submit a letter application with Form 8718. File 2012 taxes for free See Required Inclusions for the information to include with the letter application. File 2012 taxes for free Form 1028. File 2012 taxes for free   Use Form 1028 if your organization is a farmers’ cooperative seeking recognition of exemption under section 521. File 2012 taxes for free You must also submit Form 8718. File 2012 taxes for free Form 8871. File 2012 taxes for free    Use Form 8871 if you are a political party or campaign committee for a candidate for federal, state or local office seeking to be treated as tax-exempt under section 527. File 2012 taxes for free See Political Organization Income Tax Return , later. File 2012 taxes for free    Some organizations do not have to use specific application forms. File 2012 taxes for free The application your organization must use is specified in the chapter in this publication dealing with your kind of organization. File 2012 taxes for free It is also shown in the Organization Reference Chart, later. File 2012 taxes for free Power of attorney. File 2012 taxes for free   If your organization expects to be represented by an individual such as an attorney, CPA, officer or other person authorized to practice before the IRS, whether in person or by correspondence, you must file a Form 2848 with your exemption application. File 2012 taxes for free The power of attorney must specifically authorize an individual to represent your organization. File 2012 taxes for free You cannot name an organization, firm, etc. File 2012 taxes for free as your representative. File 2012 taxes for free Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose. File 2012 taxes for free The categories of individuals who can represent you before the IRS are listed on the form. File 2012 taxes for free Non-exemption for terrorist organizations. File 2012 taxes for free   An organization that is identified or designated as a terrorist organization within the meaning of section 501(p)(2) is not eligible to apply for recognition of exemption. File 2012 taxes for free User fee. File 2012 taxes for free   The law requires the payment of a user fee for determination letter requests such as your application for recognition of tax-exempt status. File 2012 taxes for free If you are filing Form 1023, user fee information is included in Part XI. File 2012 taxes for free If you are required to apply for recognition of exemption by submitting Form 1024, a letter application, etc. File 2012 taxes for free and you must pay a user fee, you should use Form 8718 to figure the amount of your user fee and to pay it. File 2012 taxes for free Your payment must accompany your request. File 2012 taxes for free The IRS will not process a request unless the fee has been paid. File 2012 taxes for free    For the current user fee amount and processing time for applications go to IRS. File 2012 taxes for free gov and select “Charities and Non-Profits” from the buttons near the top. File 2012 taxes for free Then select the underlined link “How to Apply To Be Tax-Exempt” for the latest user fees or I want to check the status of my application for more information. File 2012 taxes for free You can also call 1-877-829-5500. File 2012 taxes for free Required Inclusions Employer identification number (EIN). File 2012 taxes for free   Every exempt organization must have an EIN, whether or not it has any employees. File 2012 taxes for free An EIN is required before an exemption application is submitted. File 2012 taxes for free Information on how to apply for an EIN by using one of the following methods can be found at Employer ID Numbers (EIN): Online— This is the preferred method for requesting an EIN. File 2012 taxes for free The EIN is issued immediately once the application information is validated. File 2012 taxes for free By telephone at 1-800-829-4933, from 7:00 a. File 2012 taxes for free m. File 2012 taxes for free to 7:00 p. File 2012 taxes for free m. File 2012 taxes for free local time, Monday through Friday. File 2012 taxes for free The EIN is provided over the phone to an authorized individual. File 2012 taxes for free By mailing or faxing Form SS-4, Application for Employer Identification Number. File 2012 taxes for free If the faxed Form SS-4 includes the taxpayer's fax number, a fax will be sent back with the EIN within four (4) business days. File 2012 taxes for free    Use only one method for each entity so you do not receive more than one EIN for an entity. File 2012 taxes for free   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. File 2012 taxes for free Organizing documents. File 2012 taxes for free   Your application should include a copy of the organizing or enabling document that is signed by a principal officer or is accompanied by a written declaration signed by an authorized individual certifying that the document is a complete and accurate copy of the original or meets the requirements of a conformed copy. File 2012 taxes for free   If your organizing or enabling document are articles of incorporation, include evidence that it was filed and approved by a state official. File 2012 taxes for free (For example, a stamped “Filed” copy dated by the Secretary of State is prima facie evidence that it was filed and approved by a state official. File 2012 taxes for free ) A copy of the articles of incorporation can also be submitted with a written declaration signed by an authorized individual indicating the copy is complete and was filed and approved by the state, including the date filed. File 2012 taxes for free Bylaws. File 2012 taxes for free   Bylaws alone are not organizing documents. File 2012 taxes for free However, if your organization has adopted bylaws, include a current copy. File 2012 taxes for free The bylaws need not be signed if submitted as an attachment. File 2012 taxes for free   If your organization's name has been officially changed by an amendment to your organizing instruments, you should also attach a conformed copy of that amendment to your application. File 2012 taxes for free    Bylaws may be considered an organizing document only if they are properly structured (includes name, purpose, signatures, and intent to form an organization). File 2012 taxes for free Conformed copy. File 2012 taxes for free   A conformed copy is a copy that agrees with the original and all amendments to it. File 2012 taxes for free If the original document required a signature, the copy should either be signed by a principal officer or, if not signed, be accompanied by a written declaration signed by an authorized officer of the organization. File 2012 taxes for free With either option, the officer must certify that the document is a complete and accurate copy of the original. File 2012 taxes for free A certificate of incorporation should be approved and dated by an appropriate state official. File 2012 taxes for free Attachments. File 2012 taxes for free    When submitting attachments, every attachment should show your organization's name and EIN. File 2012 taxes for free It should also state that it is an attachment to your application form and identify the part and line item number to which it applies. File 2012 taxes for free Original documents. File 2012 taxes for free   Do not submit original documents because they become part of the IRS file and cannot be returned. File 2012 taxes for free Description of activities. File 2012 taxes for free   Your application must include a full description of the proposed activities of your organization, including each of the fundraising activities of a section 501(c)(3) organization and a narrative description of anticipated receipts and contemplated expenditures. File 2012 taxes for free When describing the activities in which your organization expects to engage, you must include the standards, criteria, procedures, or other means that your organization adopted or planned for carrying out those activities. File 2012 taxes for free   To determine the information you need to provide, you should study the part of this publication that applies to your organization. File 2012 taxes for free The appropriate chapter will describe the purposes and activities that your organization must pursue, engage in, and include in your application in order to achieve exempt status. File 2012 taxes for free   Often, your organization's articles of organization (or other organizing instruments) contain descriptions of your organization's purposes and activities. File 2012 taxes for free   Your application should describe completely and in detail your past, present, and planned activities. File 2012 taxes for free Financial data. File 2012 taxes for free   You must include in your application financial statements showing your receipts and expenditures and a balance sheet for the current year and the 3 preceding years (or for the number of years your organization was in existence, if less than 4 years). File 2012 taxes for free For each accounting period, you must describe the sources of your receipts and the nature of your expenditures. File 2012 taxes for free   If you have not yet begun operations, or have operated for less than 1 year, a proposed budget for 2 full accounting periods and a current statement of assets and liabilities will be acceptable. File 2012 taxes for free Exempt status established in application. File 2012 taxes for free   If your application and its supporting documents show that your organization meets the requirements for tax-exempt status under the Code section you applied, the IRS will issue a favorable determination letter or ruling. File 2012 taxes for free Miscellaneous Procedures To help in processing your application, be sure to attach all schedules, statements, and other documents required by the application form. File 2012 taxes for free If you do not attach them, you may have to resubmit your application or you may otherwise encounter a delay in processing your application. File 2012 taxes for free Incomplete application. File 2012 taxes for free   If an application is not complete and does not contain all the required attachments found under Required Inclusions, the IRS may return it to you for completion. File 2012 taxes for free The IRS may keep the application and send a letter requesting the missing information if most of the information has been received. File 2012 taxes for free   If the IRS returns the application or requests additional information from you, that application will be considered filed on the date the substantially completed application is postmarked, or if no postmark, received at the IRS. File 2012 taxes for free   Generally, the user fee will not be refunded if an incomplete application is filed. File 2012 taxes for free   Additional information may be requested if necessary to clarify the nature of your organization. File 2012 taxes for free Application made under wrong paragraph of section 501(c). File 2012 taxes for free   Occasionally, an organization appears to qualify for exemption under a paragraph of section 501(c) that is different from the one for which the organization applied. File 2012 taxes for free If the application was made on Form 1024, which applies to more than one paragraph of section 501(c), the organization can be recognized as exempt under any paragraph to which the form applies if the organization has agreed to have its application considered under that paragraph. File 2012 taxes for free It must also supply any additional information required for the application under the new paragraph. File 2012 taxes for free Different application form needed. File 2012 taxes for free   If a different application form is required for your organization, the IRS will so advise your organization and will provide the appropriate application form for your convenience in reapplying under that paragraph, if you wish to do so. File 2012 taxes for free Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. File 2012 taxes for free If your reply is not received within a limited time, your application will be processed only for the paragraph under which you originally applied. File 2012 taxes for free   When a specific application form is needed for the paragraph under which your organization qualifies, that form is required before a letter recognizing exemption can be issued. File 2012 taxes for free This includes cases in which a determination letter is modified to recognize an organization's exempt status under a paragraph other than the paragraph under which it originally established exemption. File 2012 taxes for free IRS responses. File 2012 taxes for free   Organizations that submit a complete application will receive an acknowledgment from the IRS. File 2012 taxes for free Others will receive a letter requesting more information or returning an incomplete application. File 2012 taxes for free Applicants also will be notified if the application is forwarded to EO Technical Office for consideration. File 2012 taxes for free These letters will be sent out as soon as possible after receipt of the organization's application. File 2012 taxes for free Withdrawal of application. File 2012 taxes for free   An application may be withdrawn at any time before the issuance of a ruling or determination letter upon the written request of a principal officer or authorized representative of your organization. File 2012 taxes for free However, the withdrawal will not prevent the information contained in the application from being used by the IRS in any subsequent examination of your organization's returns. File 2012 taxes for free The information forwarded with an application will not be returned to your organization and, generally, when an application is withdrawn, the user fee paid will not be refunded. File 2012 taxes for free Requests for withholding of information from the public. File 2012 taxes for free   The law requires many exempt organizations and private foundations to make their application forms and annual information returns available for public inspection. File 2012 taxes for free The law also requires the IRS to make available for public inspection, in accordance with section 6104 and the related regulations, your approved application for recognition of exemption (including any papers submitted in support of the application) and the ruling or determination letter (discussed later, under Rulings and Determination Letters . File 2012 taxes for free )   Any information submitted in the application or in support of it that relates to any trade secret, patent, process, style of work, or apparatus, upon request, can be withheld from public inspection if the IRS determines that the disclosure of such information would adversely affect the organization. File 2012 taxes for free Your request must: Identify the material to be withheld (the document, page, paragraph, and line) by clearly marking it “Not Subject To Public Inspection. File 2012 taxes for free ” Include the reasons for your organization's position that the information is of the type that can be withheld from public inspection. File 2012 taxes for free Be filed with the office where your organization files the documents in which the material to be withheld is contained. File 2012 taxes for free Where to file. File 2012 taxes for free   Send your application for exempt status and Form 8718, (if required) to: Internal Revenue Service PO Box 12192 Covington, KY 41012-0192   Your application will be considered by EO Determinations, who will either issue a favorable determination letter to your organization, issue an adverse determination letter denying the exempt status claimed in the application, or refer the case to the Exempt Organizations Technical Office (EO Technical). File 2012 taxes for free    Form 8940, Request for Miscellaneous Determination. File 2012 taxes for free You can request miscellaneous determinations under sections 507, 509(a), 4940, 4942, 4945, and 6033 with Form 8940. File 2012 taxes for free Nonexempt charitable trusts also file Form 8940 for an initial determination of section 509(a)(3) status or change to their type. File 2012 taxes for free See Form 8940 and instructions for more information. File 2012 taxes for free Requests other than applications. File 2012 taxes for free Requests other than applications for recognition of exemption or Form 8940 (for example, requests for rulings involving feeder organizations, application of excise taxes to activities of private foundations, taxation of unrelated business income, etc. File 2012 taxes for free ) should be sent to: Internal Revenue Service  Attention: EO Letter Rulings PO Box 27720 McPherson Station Washington, DC 20038 These requests, similar to applications for recognition of exemption previously discussed, must be accompanied by the appropriate user fee. File 2012 taxes for free The schedule for user fees, including those for requests other than applications, can be found in Revenue Procedure 2013-8, 2013-1 I. File 2012 taxes for free R. File 2012 taxes for free B. File 2012 taxes for free 237. File 2012 taxes for free Referral to EO Technical. File 2012 taxes for free   EO Determinations will refer to EO Technical any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. File 2012 taxes for free EO Determinations can request technical advice on any technical or procedural question that cannot be resolved on the basis of law, regulations, or a clearly applicable revenue ruling or other published precedent. File 2012 taxes for free An organization can request that an issue be referred to EO Technical for technical advice if it feels that a lack of uniformity exists as to the disposition of the issue or if an issue is so unusual or complex as to warrant consideration by EO Technical. File 2012 taxes for free If a determination letter is issued based on technical advice from EO Technical regarding qualification for exemption or foundation status, no further administrative appeal is available on the issue that was the subject of technical advice. File 2012 taxes for free Reminder. File 2012 taxes for free   The law requires payment of a user fee for determination letter requests. File 2012 taxes for free Go to IRS. File 2012 taxes for free gov/Charities and select Current User Fees-Exempt Organizations to find the required payment. File 2012 taxes for free Payment must accompany each request. File 2012 taxes for free Rulings and Determination Letters Elimination of the advance public charity status. File 2012 taxes for free   New regulations eliminate the advance ruling process for a section 501(c)(3) organization. File 2012 taxes for free Under the new regulations, a new section 501(c)(3) organization will be classified as a publicly supported organization and not a private foundation if it can show when it applies for tax-exempt status that it reasonably can be expected to be publicly supported. File 2012 taxes for free The new rules no longer require the organization to file Form 8734, Support Schedule for Advance Ruling Period, after completing its first 5 tax years. File 2012 taxes for free See Elimination of the Advance Ruling Process . File 2012 taxes for free An organization must describe fully the activities in which it expects to engage. File 2012 taxes for free This includes standards, procedures, or other means adopted or planned by the organization for carrying out its activities, expected sources of funds, and the nature of its contemplated expenses. File 2012 taxes for free When an organization does not supply the information previously mentioned under Application Procedures , or fails to furnish a sufficiently detailed description of its proposed activities to permit a conclusion that it will clearly be exempt, a proposed adverse determination letter or ruling may be issued. File 2012 taxes for free Adverse determination. File 2012 taxes for free   A proposed adverse ruling or determination letter will be issued to an organization that has not provided sufficiently detailed information to establish that it qualifies for exemption or if the information provided establishes that it does not qualify for exemption. File 2012 taxes for free An organization can appeal a proposed adverse ruling or determination letter. File 2012 taxes for free See Appeal Procedures , later. File 2012 taxes for free Effective Date of Exemption A ruling or determination letter recognizing exemption is usually effective as of the date of formation of an organization if, during the period before the date of the ruling or determination letter, its purposes and activities were those required by the law. File 2012 taxes for free (See Application for Recognition of Exemption in chapter 3 for the special rule for organizations applying for recognition of exemption under section 501(c)(3). File 2012 taxes for free ) Upon obtaining recognition of exemption, the organization can file a claim for a refund of income taxes paid for the period for which its exempt status is recognized. File 2012 taxes for free If an organization is required to alter its activities or substantially amend its charter to qualify, the ruling or determination letter recognizing exemption will be effective as of the date specified in the letter. File 2012 taxes for free If a nonsubstantive amendment is made, such as correction of a clerical error in the enabling instrument or the addition of a dissolution clause, exemption will ordinarily be recognized as of the date of formation if the activities of the organization before the ruling or determination are consistent with the exemption requirements. File 2012 taxes for free A ruling or determination letter recognizing exemption cannot be relied on if there is a material change, inconsistent with exemption, in the character, the purpose, or the method of operation of the organization. File 2012 taxes for free Also, a ruling or determination letter cannot be relied on if it is based on any inaccurate material factual representations. File 2012 taxes for free Revocation or Modification of Exemption A ruling or determination letter recognizing exemption may be revoked or modified by: A notice to the organization to which the ruling or determination letter originally was issued, Enactment of legislation or ratification of a tax treaty, A decision of the United States Supreme Court, Issuance of temporary or final regulations, or Issuance of a revenue ruling, a revenue procedure, or other statement published in the Internal Revenue Bulletin or Cumulative Bulletin. File 2012 taxes for free When revocation takes effect. File 2012 taxes for free   If the organization omitted or misstated a material fact, operated in a manner materially different from that originally represented, or, with regard to organizations to which section 503 applies, engaged in a prohibited transaction (such as diverting corpus or income from its exempt purpose), the revocation or modification may be retroactive. File 2012 taxes for free Material change in organization. File 2012 taxes for free   If there is a material change, inconsistent with exemption, in the character, purpose, or method of operation of the organization, revocation or modification will ordinarily take effect as of the date of that material change. File 2012 taxes for free Relief from retroactivity. File 2012 taxes for free   If a ruling or determination letter was issued in error or the IRS changed its position after issuing a letter or ruling, and if section 7805(b) relief is granted, retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination letter was modified or revoked. File 2012 taxes for free For more information on requesting section 7805(b) relief, see Revenue Procedure 2013-4, 2013-1 I. File 2012 taxes for free R. File 2012 taxes for free B. File 2012 taxes for free 126, sec. File 2012 taxes for free 13 (or later update). File 2012 taxes for free Foundations. File 2012 taxes for free   The determination of the effective date is the same for the revocation or modification of foundation status or operating foundation status unless the effective date is expressly covered by statute or regulations. File 2012 taxes for free Written notice. File 2012 taxes for free   If an EO area manager concludes, as a result of examining an information return or considering information from any other source, that a ruling or determination letter should be revoked or modified, the organization will be advised in writing of the proposed action and the reasons for it. File 2012 taxes for free   The organization will also be advised of its right to protest the proposed action by requesting Appeals Office consideration. File 2012 taxes for free The appeal procedures are discussed next. File 2012 taxes for free Appeal Procedures If your organization applies for tax-exempt status and EO Determination decides your organization does not qualify, your organization will be advised of its rights to protest the determination by requesting Appeals Office consideration. File 2012 taxes for free This process does not apply to determinations issued by EO Technical. File 2012 taxes for free Your organization must submit a statement of its views fully explaining its reasoning. File 2012 taxes for free The statement must be submitted within 30 days from the date of the adverse determination letter and must state whether it wishes Appeals Office consideration. File 2012 taxes for free Representation. File 2012 taxes for free   A principal officer or trustee can represent an organization at any level of appeal within the IRS. File 2012 taxes for free Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization. File 2012 taxes for free   If the organization's representative attends a conference without a principal officer or trustee, the representative must file a proper power of attorney or a tax information authorization before receiving or inspecting confidential information. File 2012 taxes for free Form 2848 or Form 8821, Tax Information Authorization, as appropriate (or any other properly written power of attorney or authorization), can be used for this purpose. File 2012 taxes for free These forms can be obtained from the IRS. File 2012 taxes for free For more information, see Publication 947, Practice Before the IRS and Power of Attorney. File 2012 taxes for free Appeals Office Consideration EO Determinations will consider the statement protesting and appealing (hereinafter appealing) the adverse determination and decide if the information affects its determination. File 2012 taxes for free If the appeal does not provide a basis to reconsider its adverse determination, it will forward the appeal and case file to the Appeals Office. File 2012 taxes for free For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. File 2012 taxes for free The appeal should include the following information. File 2012 taxes for free The organization's name, address, daytime telephone number, and employer identification number. File 2012 taxes for free A statement that the organization wants to protest the determination. File 2012 taxes for free A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter. File 2012 taxes for free A statement of facts supporting the organization's position in any contested factual issue. File 2012 taxes for free A statement outlining the law or other authority the organization is relying on. File 2012 taxes for free A statement as to whether a conference at the Appeals Office is desired. File 2012 taxes for free The statement of facts in item 4 must be declared true under penalties of perjury. File 2012 taxes for free This may be done by adding to the protest the following signed declaration:   “Under penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, it is true, correct, and complete. File 2012 taxes for free ”           Signature. File 2012 taxes for free   If the organization's representative submits the appeal, a substitute declaration must be included, stating: That the representative prepared the appeal and accompanying documents, and Whether the representative knows personally that the statements of fact contained in the appeal and accompanying documents are true and correct. File 2012 taxes for free Be sure the appeal contains all of the information requested. File 2012 taxes for free Incomplete appeals will be returned for completion. File 2012 taxes for free If a conference is requested, it will be held at the Appeals Office, unless the organization requests that the meeting be held at a field office convenient to both parties. File 2012 taxes for free The Appeals Office, after considering the organization's appeal as well as information presented in any conference held, will notify the organization of its decision and issue an appropriate determination letter. File 2012 taxes for free An adverse decision can be appealed to the courts (discussed later). File 2012 taxes for free The Appeals Office must request technical advice from EO Technical on any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. File 2012 taxes for free If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice. File 2012 taxes for free Any determination letter issued on the basis of technical advice from EO Technical cannot be appealed to the Appeals Office for those issues that were the subject of the technical advice from EO Technical. File 2012 taxes for free EO Technical Consideration If an application is referred to EO Technical for issuance of a ruling and an adverse ruling is issued, the organization will be informed of the basis for the conclusion, its right to file a protest within 30 days, and its right to have a conference with EO Technical. File 2012 taxes for free Administrative Remedies In the case of an application under section 501(c)(3), all of the following actions, called administrative remedies, must be completed by your organization before an unfavorable ruling or determination letter from the IRS can be appealed to the courts. File 2012 taxes for free The filing of a substantially completed application Form 1023 or group exemption request under section 501(c)(3) (described earlier in this chapter) or the filing of a request for a determination of foundation status (see Private Foundations and Public Charities in chapter 3). File 2012 taxes for free In the case of a late-filed application, requesting relief under Regulations section 301. File 2012 taxes for free 9100 regarding applications for extensions of time for making an election or application for relief from tax (see Application for Recognition of Exemption in chapter 3). File 2012 taxes for free The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status. File 2012 taxes for free Exhaustion of all administrative appeals available within the IRS, including protest of an adverse ruling issued by EO Technical in the case of an exemption application. File 2012 taxes for free The actions just described will not be considered completed until the IRS has had a reasonable time to act upon the appeal or protest, as the case may be. File 2012 taxes for free An organization will not be considered to have exhausted its administrative remedies before the earlier of: The completion of the steps just listed and the sending by certified or registered mail of a notice of final determination, or The expiration of the 270-day period in which the IRS has not issued a notice of final determination and the organization has taken, in a timely manner, all reasonable steps to secure a ruling or determination. File 2012 taxes for free 270-day period. File 2012 taxes for free   The 270-day period will be considered by the IRS to begin on the date a substantially completed Form 1023 or group exemption request is sent to the IRS. File 2012 taxes for free See Application Procedures , earlier, for information needed to complete Form 1023. File 2012 taxes for free   If the application does not contain all of the required items, it will not be further processed and may be returned to the applicant for completion. File 2012 taxes for free The 270-day period, in this event, will not be considered as starting until the date the application is remailed to the IRS with the requested information, or, if a postmark is not evident, on the date the IRS receives a substantially completed application. File 2012 taxes for free Appeal to Courts If the IRS issues an unfavorable determination letter or ruling to your organization and you have exhausted all the administrative remedies just discussed, your organization can seek judicial remedies. File 2012 taxes for free For example, if your organization has paid the tax resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a refund in a U. File 2012 taxes for free S. File 2012 taxes for free District Court or the U. File 2012 taxes for free S. File 2012 taxes for free Court of Federal Claims. File 2012 taxes for free Or, if your organization elected not to pay the tax deficiency resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a redetermination of the tax deficiencies in the United States Tax Court. File 2012 taxes for free For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. File 2012 taxes for free In certain situations, your organization can file suit for a declaratory judgment in the U. File 2012 taxes for free S. File 2012 taxes for free District Court for the District of Columbia, the U. File 2012 taxes for free S. File 2012 taxes for free Court of Federal Claims, or the U. File 2012 taxes for free S. File 2012 taxes for free Tax Court. File 2012 taxes for free This remedy is available if your organization received an adverse notice of final determination, or if the IRS failed to make a timely determination on your initial or continuing qualification or classification as an exempt organization. File 2012 taxes for free However, your exempt status claim must be as: An organization qualifying under section 501(c)(3), An organization to which a deduction for a contribution is allowed under section 170(c)(2), An organization that is a private foundation under section 509(a), A private operating foundation under section 4942(j)(3), or A cooperative organization that is exempt from tax under section 521. File 2012 taxes for free Adverse notice of final determination. File 2012 taxes for free   The adverse notice of final determination referred to above is a ruling or determination letter sent by certified or registered mail holding that your organization: Is not described in section 501(c)(3) or section 170(c)(2), Is a private foundation as defined in section 4942(j)(3), or Is a public charity described in a part of section 509(a) or section 170(b)(1)(A) other than the part under which your organization requested classification. File 2012 taxes for free Favorable court rulings - IRS procedure. File 2012 taxes for free   If a suit results in a final determination that your organization is exempt from tax, the IRS will issue a favorable ruling or determination letter, provided your organization has filed an application for exemption and submitted a statement that the underlying facts and applicable law are the same as in the period considered by the court. File 2012 taxes for free Group Exemption Letter A group exemption letter is a ruling or determination letter issued to a central organization recognizing on a group basis the exemption under section 501(c) of subordinate organizations on whose behalf the central organization has applied for recognition of exemption. File 2012 taxes for free A central organization is an organization that has one or more subordinates under its general supervision or control. File 2012 taxes for free A subordinate organization is a chapter, local, post, or unit of a central organization. File 2012 taxes for free A central organization may be a subordinate itself, such as a state organization that has subordinate units and is itself affiliated with a national (central) organization. File 2012 taxes for free A subordinate organization may or may not be incorporated, but it must have an organizing document. File 2012 taxes for free A subordinate that is organized and operated in a foreign country cannot be included in a group exemption letter. File 2012 taxes for free A subordinate described in section 501(c)(3) cannot be included in a group exemption letter if it is a private foundation described in section 509(a). File 2012 taxes for free If your organization is a subordinate controlled by a central organization (for example, a church, a veterans' organization, or a fraternal organization), you should check with the central organization to see if it has been issued a group exemption letter that covers your organization. File 2012 taxes for free If it has, you do not have to file a separate application unless your organization no longer wants to be included in the group exemption letter. File 2012 taxes for free If the group exemption letter does not cover your organization, ask your central organization about being included in the next annual group ruling update that it submits to the IRS. File 2012 taxes for free Central Organization Application Procedure If your organization is a central organization with affiliated subordinates under its control, it can apply for a group exemption letter for its subordinates, provided it has obtained recognition of its own exemption before or concurrently with the group exemption. File 2012 taxes for free You should make the application for such subordinates by letter instead of submitting either Form 1023 or 1024. File 2012 taxes for free This procedure relieves each of the subordinates covered by a group exemption letter from filing its own application. File 2012 taxes for free A central organization obtains its own recognition of exemption by sending its application to the IRS address shown on Form 8718 or Form 1023. File 2012 taxes for free If the central organization has previously obtained recognition of its own exemption, it must indicate its employer identification number and the date of the letter recognizing its exemption. File 2012 taxes for free It need not forward documents already submitted. File 2012 taxes for free However, if it has not already done so, the central organization must submit a copy of any amendment to its governing instruments or internal regulations as well as any information about changes in its character, purposes, or method of operation. File 2012 taxes for free Employer identification number. File 2012 taxes for free   The central organization must have an EIN before it submits a completed exemption or group exemption application. File 2012 taxes for free Each subordinate must have its own EIN, even if it has no employees. File 2012 taxes for free When submitting its group exemption application, the central organization must provide an EIN for each subordinate organization. File 2012 taxes for free Information required for subordinate organizations. File 2012 taxes for free   In addition to the information required to obtain recognition of its own exemption, the central organization must submit information for those subordinates to be included in the group exemption letter. File 2012 taxes for free The information should be forwarded in a letter signed by a principal officer of the central organization setting forth or including as attachments the following. File 2012 taxes for free Information verifying that the subordinates: Are affiliated with the central organization at the close of its annual accounting period; Are subject to its general supervision or control; Are all eligible to qualify for exemption under the same paragraph of section 501(c), though not necessarily the paragraph under which the central organization itself is exempt; Are not private foundations if the application for a group exemption letter involves section 501(c)(3); Are all on the same accounting period as the central organization if they are to be included in group returns; and Are organizations that have been formed within the 15-month period preceding the date of submission of the group exemption application if they are claiming section 501(c)(3) status and are subject to the requirements of section 508(a) and wish to be recognized as exempt from their dates of creation (a group exemption letter may be issued covering subordinates, one or more of which have not been organized within the 15-month period preceding the date of submission, if all subordinates are willing to be recognized as exempt only from the date of application). File 2012 taxes for free A detailed description of the purposes and activities of the subordinates, including the sources of receipts and the nature of expenditures. File 2012 taxes for free A sample copy of a uniform governing instrument (such as a charter or articles of association) adopted by the subordinates, or, in its absence, copies of representative instruments. File 2012 taxes for free An affirmation to the effect that, to the best of the officer's knowledge, the purposes and activities of the subordinates are as stated in (2) and (3), above. File 2012 taxes for free A statement that each of the subordinates has provided a written authorization to the central organization, signed by an authorized officer of the subordinate, agreeing to be included in the group exemption (see also New 501(c)(3) organizations that want to be included , later in this section). File 2012 taxes for free A list of subordinates to be included in the group exemption letter to which the IRS has issued an outstanding ruling or determination letter relating to exemption. File 2012 taxes for free If the application for a group exemption letter involves section 501(c)(3) and is subject to the provisions of the Code requiring that it give timely notice that it is not a private foundation (see Private Foundations in chapter 3), an affirmation to the effect that, to the best of the officer's knowledge and belief, no subordinate to be included in the group exemption letter is a private foundation as defined in section 509(a). File 2012 taxes for free For each subordinate that is a school claiming exemption under section 501(c)(3), the information required by Revenue Ruling 71-447, 1971-2 C. File 2012 taxes for free B. File 2012 taxes for free 230 and Revenue Procedure 75-50, 1975-2 C. File 2012 taxes for free B. File 2012 taxes for free 587 (these requirements are fully described in chapter 3, under Private Schools ; see also Schedule B, Form 1023). File 2012 taxes for free For any school affiliated with a church, the information to show that the provisions of Revenue Ruling 75-231, 1975-1 C. File 2012 taxes for free B. File 2012 taxes for free 158, have been met. File 2012 taxes for free A list of the names, mailing addresses, actual addresses if different, and EINs of subordinates to be included in the group exemption letter. File 2012 taxes for free A current directory of subordinates may be furnished instead of the list if it includes the required information and if the subordinates not to be included in the group exemption letter are identified. File 2012 taxes for free New 501(c)(3) organizations that want to be included. File 2012 taxes for free   A new organization, described in section 501(c)(3), that wants to be included in a group exemption letter must submit its authorization (as explained in item number 5, earlier, under Information required for subordinate organizations ) to the central organization before the end of the 15th month after it was formed in order to satisfy the requirement of section 508(a). File 2012 taxes for free The central organization must also include this subordinate in its next annual submission of information, as discussed later, under Information Required Annually . File 2012 taxes for free Keeping the Group Exemption Letter in Force Continued effectiveness of a group exemption letter is based on the following conditions. File 2012 taxes for free The continued existence of the central organization. File 2012 taxes for free The continued qualification of the central organization for exemption under section 501(c). File 2012 taxes for free The submission by the central organization of the information regarding its subordinate organizations that is required annually (described under Information Required Annually). File 2012 taxes for free The annual filing of an information return (Form 990, for example) by the central organization if required. File 2012 taxes for free The continued effectiveness of a group exemption letter as to a particular subordinate is based on these four conditions, as well as on the continued conformity by the subordinate to the requirements for inclusion in a group exemption letter, the authorization for inclusion, and the annual filing of any required information return for the subordinate. File 2012 taxes for free Information Required Annually To maintain a group exemption letter, the central organization must submit annually, at least 90 days before the close of its annual accounting period, all of the following information. File 2012 taxes for free Information about all changes in the purposes, character, or method of operation of the subordinates included in the group exemption letter. File 2012 taxes for free A separate list (that includes the names, mailing addresses, actual addresses if different, and EINs of the affected subordinates) for each of the three following categories. File 2012 taxes for free Subordinates that have changed their names or addresses during the year. File 2012 taxes for free Subordinates no longer to be included in the group exemption letter because they no longer exist or have disaffiliated from or withdrawn their authorization to the central organization. File 2012 taxes for free Subordinates to be added to the group exemption letter because they are newly organized or affiliated or because they have recently authorized the central organization to include them. File 2012 taxes for free An annotated directory of subordinates will not be accepted for this purpose. File 2012 taxes for free If there were none of the above changes, the central organization must submit a statement to that effect. File 2012 taxes for free The same information about new subordinates that was required in the initial application for group exemption. File 2012 taxes for free (This information is listed in items 1 through 10, under Information required for subordinate organizations. File 2012 taxes for free , earlier. File 2012 taxes for free ) If a new subordinate does not differ in any material respects from the subordinates included in the application for group exemption, however, a statement to this effect may be submitted in lieu of detailed information. File 2012 taxes for free The organization should send this information to:   Ogden Service Center  Mail Stop 6271 Ogden, UT 84404-4749 Submitting the required information annually does not relieve the central organization or any of its subordinates of the duty to submit any other information that may be required by an EO area manager to determine whether the conditions for continued exemption are being met. File 2012 taxes for free Events Causing Loss of Group Exemption A group exemption letter no longer has effect, for either a particular subordinate or the group as a whole, when: The central organization notifies the IRS that it is going out of existence, The central organization notifies the IRS, by its annual submission or otherwise, that any of its subordinates will no longer fulfill the conditions for continued effectiveness, explained earlier, or The IRS notifies the central organization or the affected subordinate that the group exemption letter will no longer have effect for some or all of the group because the conditions for continued effectiveness of a group exemption letter have not been fulfilled. File 2012 taxes for free When notice is given under any of these three conditions, the IRS will no longer recognize the exempt status of the affected subordinates until they file separate applications on their own behalf or the central organization files complete supporting information for their reinclusion in the group exemption at the time of its annual submission. File 2012 taxes for free However, when the notice is given by the IRS and the withdrawal of recognition is based on the failure of the organization to comply with the requirements for recognition of tax-exempt status under the particular subsection of section 501(c), the revocation will ordinarily take effect as of the date of that failure. File 2012 taxes for free The notice, however, will be given only after the appeal procedures described earlier in this chapter are completed. File 2012 taxes for free Prev  Up  Next   Home   More Online Publications