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File Form 1040x Online

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File Form 1040x Online

File form 1040x online Publication 3 - Main Content Table of Contents Gross IncomeForeign Source Income Military Spouses Residency Relief Act (MSRRA) Community Property Form W-2 Codes Adjustments to IncomeArmed Forces Reservists Individual Retirement Arrangements Moving Expenses Combat Zone ExclusionCombat Zone Serving in a Combat Zone Amount of Exclusion Alien StatusResident Aliens Nonresident Aliens Dual-Status Aliens Sale of HomePeriod of suspension. File form 1040x online Qualified official extended duty. File form 1040x online ForeclosuresLump Sum Portion of Settlement Payment. File form 1040x online Interest Payment on Lump Sum Portion of Settlement Payment. File form 1040x online Lost Equity Portion of Settlement Payment. File form 1040x online The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. File form 1040x online Interest Payment on Lost Equity Portion of Settlement Payment. File form 1040x online Itemized DeductionsEmployee Business Expenses Repayments CreditsFirst-Time Homebuyer Credit Child Tax Credit Earned Income Credit Credit for Excess Social Security Tax Withheld Forgiveness of Decedent's Tax LiabilityCombat Zone Related Forgiveness Terrorist or Military Action Related Forgiveness Claims for Tax Forgiveness Filing ReturnsSame-Sex Marriage Where To File When To File Signing Returns Extension of DeadlinesService That Qualifies for an Extension of Deadline Length of Extension Actions for Which Deadlines Are Extended Deferral of Payment Maximum Rate of Interest How To Get Tax HelpLow Income Taxpayer Clinics Gross Income Members of the Armed Forces receive many different types of pay and allowances. File form 1040x online Some are included in gross income while others are excluded from gross income. File form 1040x online Included items (Table 1) are subject to tax and must be reported on your tax return. File form 1040x online Excluded items (Table 2) are not subject to tax, but may have to be shown on your tax return. File form 1040x online For information on the exclusion of pay for service in a combat zone and other tax benefits for combat zone participants, see Combat Zone Exclusion and Extension of Deadlines , later. File form 1040x online Table 1. File form 1040x online Included Items These items are included in gross income, unless the pay is for service in a combat zone. File form 1040x online Basic pay • Active duty   Bonus pay • Career status   • Attendance at a designated service school     • Enlistment  • Officer   • Back wages     • Overseas extension   • CONUS COLA       • Reenlistment   • Drills         • Reserve training         • Training duty   Other pay  • Accrued leave          • High deployment per diem Special • Aviation career incentives      • Personal money allowances paid to pay • Career sea     high-ranking officers   • Diving duty      • Student loan repayment from programs   • Foreign duty (outside the 48 contiguous     such as the Department of Defense   states and the District of Columbia)     Educational Loan Repayment Program   • Foreign language proficiency     when year's service (requirement) is not   • Hardship duty     attributable to a combat zone   • Hostile fire or imminent danger         • Medical and dental officers   Incentive pay  • Submarine   • Nuclear-qualified officers      • Flight   • Optometry      • Hazardous duty   • Pharmacy      • High altitude/Low Opening (HALO)   • Special compensation for assistance with activities of daily living (SCAADL)         • Special duty assignment pay         • Veterinarian         • Voluntary Separation Incentive       Basic allowance for housing (BAH). File form 1040x online   You can still deduct mortgage interest and real estate taxes on your home if you pay these expenses with your BAH. File form 1040x online Table 2. File form 1040x online Excluded Items The exclusion for certain items applies whether the item is furnished in kind or is a reimbursement or allowance. File form 1040x online There is no exclusion for the personal use of a government-provided vehicle. File form 1040x online Combat  zone pay • Compensation for active service while in a combat zone Note: Limited amount for officers     • Housing and cost-of-living allowances abroad paid by the U. File form 1040x online S. File form 1040x online Government or by a foreign government         • OHA (Overseas Housing Allowance)                     Other pay • Defense counseling         • Disability, including payments received for injuries incurred as a direct result of a terrorist or military action         • Group-term life insurance   Moving • Dislocation   • Professional education   allowances • Military base realignment and   • ROTC educational and subsistence     closure benefit    allowances     (the exclusion is limited as   • State bonus pay for service in a     described above)   combat zone     • Move-in housing   • Survivor and retirement protection     • Moving household and   plan premiums     personal items   • Uniform allowances     • Moving trailers or mobile homes   • Uniforms furnished to enlisted     • Storage   personnel     • Temporary lodging and         temporary lodging expenses                 Travel • Annual round trip for dependent Death • Burial services   allowances students allowances • Death gratuity payments to     • Leave between consecutive   eligible survivors     overseas tours   • Travel of dependents to burial site     • Reassignment in a dependent         restricted status Family • Certain educational expenses for     • Transportation for you or your allowances dependents     dependents during ship overhaul   • Emergencies     or inactivation   • Evacuation to a place of safety     • Per diem   • Separation             In-kind military • Dependent-care assistance program Living • BAH (Basic Allowance for Housing)   benefits • Legal assistance allowances • BAS (Basic Allowance for Subsistence)     • Medical/dental care         • Commissary/exchange discounts         • Space-available travel on government aircraft           Death gratuity. File form 1040x online   Any death gratuity paid to a survivor of a member of the Armed Forces is excluded from gross income. File form 1040x online Differential wage payments. File form 1040x online   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and that represent all or a portion of the wages the individual would have received from the employer if the individual was performing services for the employer. File form 1040x online These amounts are taxable and cannot be excluded as combat pay. File form 1040x online Military base realignment and closure benefit. File form 1040x online   Payments made under the Homeowners Assistance Program (HAP) generally are excluded from income. File form 1040x online However, the excludable amount cannot be more than the maximum amount described in subsection (c) of 42 USC 3374 as in effect on November 6, 2009. File form 1040x online Any part of the payment that is more than this limit is included in gross income. File form 1040x online For more information about the HAP, see http://hap. File form 1040x online usace. File form 1040x online army. File form 1040x online mil/Overview. File form 1040x online html. File form 1040x online Qualified reservist distribution (QRD). File form 1040x online   A QRD is a distribution to an individual of all or part of the individual's balance in a cafeteria plan or health flexible spending arrangement if: The individual was a reservist who was ordered or called to active duty for more than 179 days or for an indefinite period, and The distribution is made no sooner than the date the reservist was ordered or called to active duty and no later than the last day reimbursements could otherwise be made under the arrangement for the plan year which includes the date of the order or the call to duty. File form 1040x online A QRD is included in gross income and is subject to employment taxes. File form 1040x online The employer must include the QRD (reduced by after-tax contributions to the health flexible spending arrangement) as wages on Form W-2, Wage and Tax Statement. File form 1040x online Thrift Savings Plan (TSP) distributions. File form 1040x online   If you participate in the Uniformed Services TSP and receive a distribution from your account, the distribution is generally included in your taxable income. File form 1040x online   If your contributions included tax-exempt combat zone pay, the part of the distribution attributable to those contributions is tax exempt. File form 1040x online However, the earnings on the tax-exempt portion of the distribution are taxable. File form 1040x online The TSP will provide a statement showing the taxable and non-taxable portions of the distribution. File form 1040x online Roth Thrift Savings Plan (TSP) balance. File form 1040x online   You may be able to contribute to a designated Roth Account through the TSP known as the Roth TSP. File form 1040x online Roth TSP contributions are after-tax contributions, subject to the same contribution limits as the traditional TSP. File form 1040x online Qualified distributions from a Roth TSP are not included in your income. File form 1040x online For more details, see Thrift Savings Accounts in Part II of Publication 721, Tax Guide to U. File form 1040x online S. File form 1040x online Civil Service Retirement Benefits. File form 1040x online State bonus payments. File form 1040x online   Bonus payments made by a state (or a political subdivision thereof) to a member or former member of the uniformed services of the United States or to a dependent of such member are considered combat pay (and therefore may not be taxable) if the payments are made only because of the member's service in a combat zone. File form 1040x online See Combat Zone , later, for a list of designated combat zones. File form 1040x online Foreign Source Income If you are a U. File form 1040x online S. File form 1040x online citizen with income from sources outside the United States (foreign income), you must report all of that income (except for amounts that U. File form 1040x online S. File form 1040x online law allows you to exclude) on your tax return. File form 1040x online This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2 or a Form 1099. File form 1040x online This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). File form 1040x online Certain taxpayers can exclude income earned in foreign countries. File form 1040x online For 2013, this exclusion amount can be as much as $97,600. File form 1040x online However, the foreign earned income exclusion does not apply to the wages and salaries of military and civilian employees of the U. File form 1040x online S. File form 1040x online Government. File form 1040x online Employees of the U. File form 1040x online S. File form 1040x online Government include those who work at United States Armed Forces exchanges, commissioned and noncommissioned officers' messes, Armed Forces motion picture services, and similar personnel. File form 1040x online Other foreign income earned by military personnel or their spouses may be eligible for the foreign earned income exclusion. File form 1040x online For more information on the exclusion, see Publication 54. File form 1040x online Residents of American Samoa may be able to exclude income from American Samoa. File form 1040x online This possession exclusion does not apply to wages and salaries of military and civilian employees of the U. File form 1040x online S. File form 1040x online Government. File form 1040x online If you need information on the possession exclusion, see Publication 570, Tax Guide for Individuals With Income From U. File form 1040x online S. File form 1040x online Possessions. File form 1040x online Military Spouses Residency Relief Act (MSRRA) If you are the civilian spouse of an active duty U. File form 1040x online S. File form 1040x online military servicemember and your domicile is the same as the servicemember's, you can choose to keep your prior residence or domicile for tax purposes when you accompany the servicemember spouse, who is relocating under military orders to a new duty station in one of the 50 states, the District of Columbia, or a U. File form 1040x online S. File form 1040x online possession. File form 1040x online See Publication 570 for more information. File form 1040x online Domicile. File form 1040x online   Your domicile is the permanent legal home you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. File form 1040x online It is not always where you presently live. File form 1040x online Community Property The pay you earn as a member of the Armed Forces may be subject to community property laws depending on your marital status, your domicile, and the nature of the payment. File form 1040x online The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. File form 1040x online Marital status. File form 1040x online   Community property rules apply to married persons whose domicile during the tax year was in a community property state. File form 1040x online The rules may affect your tax liability if you file separate returns or are divorced during the year. File form 1040x online Nevada, Washington, and California domestic partners. File form 1040x online   A registered domestic partner in Nevada, Washington, or California generally must report half the combined income of the individual and his or her domestic partner. File form 1040x online See Form 8958 and Publication 555, Community Property. File form 1040x online Nature of the payment. File form 1040x online   Active duty military pay is subject to community property laws. File form 1040x online Armed Forces retired or retainer pay may be subject to community property laws. File form 1040x online   For more information on community property laws, see Publication 555. File form 1040x online Form W-2 Codes Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. File form 1040x online Form W-2 also shows other amounts that you may find important in box 12. File form 1040x online The amounts shown in box 12 are generally preceded by a code. File form 1040x online A list of codes used in box 12 is shown, next. File form 1040x online Form W-2 Reference Guide for Box 12 Codes A Uncollected social security or RRTA J Nontaxable sick pay T Adoption benefits   tax on tips             K 20% excise tax on excess golden V Income from exercise of B Uncollected Medicare tax on tips   parachute payments   nonstatutory stock option(s)             C Taxable cost of group-term life L Substantiated employee business W Employer contributions (including   insurance over $50,000   expense reimbursements   employee contributions through a           cafeteria plan) to an employee's D Elective deferrals under a section M Uncollected social security or RRTA   health savings account (HSA)   401(k) cash or deferred arrangement   tax on taxable cost of group-term life       plan (including a SIMPLE 401(k)   insurance over $50,000 (former Y Deferrals under a section 409A   arrangement)   employees only)   nonqualified deferred           compensation plan E Elective deferrals under a section N Uncollected Medicare tax on taxable       403(b) salary reduction agreement   cost of group-term life insurance Z Income under section 409A on a       over $50,000 (former employees only)   nonqualified deferred F Elective deferrals under a section       compensation plan   408(k)(6) salary reduction SEP P Excludable moving expense           reimbursements paid directly to AA Designated Roth contributions G Elective deferrals and employer   employee   under a section 401(k) plan   contributions (including nonelective           deferrals) to a section 457(b) Q Nontaxable combat pay BB Designated Roth contributions   deferred compensation plan       under a section 403(b) plan     R Employer contributions to an Archer     H Elective deferrals to a section   MSA DD Cost of employer-sponsored   501(c)(18)(D) tax-exempt       health coverage   organization plan S Employee salary reduction contributions under a section 408(p) SIMPLE  EE  Designated Roth contributions under a governmental section 457(b) plan  Note. File form 1040x online For more information on these codes, see your Form(s) W-2. File form 1040x online Adjustments to Income Adjusted gross income is your total income minus certain adjustments. File form 1040x online The following adjustments are of particular interest to members of the Armed Forces. File form 1040x online Armed Forces Reservists If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your unreimbursed travel expenses as an adjustment to income on line 24 of Form 1040, U. File form 1040x online S. File form 1040x online Individual Income Tax Return, rather than as a miscellaneous itemized deduction. File form 1040x online Include all unreimbursed expenses from the time you leave home until the time you return home. File form 1040x online The deduction is limited to the amount the federal government generally reimburses its employees for travel expenses. File form 1040x online For more information about this limit, see Per Diem and Car Allowances in chapter 6 of Publication 463. File form 1040x online Member of a reserve component. File form 1040x online   You are a member of a reserve component of the Armed Forces if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. File form 1040x online How to report. File form 1040x online   If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. File form 1040x online Then enter on Form 1040, line 24, the part of your expenses, up to the federal rate, included on Form 2106, line 10, or Form 2106-EZ, line 6, that is for reserve-related travel more than 100 miles from your home. File form 1040x online Subtract this amount from the total on Form 2106, line 10, or Form 2106-EZ, line 6, and deduct the balance as an itemized deduction on Schedule A (Form 1040), line 21. File form 1040x online Example. File form 1040x online Captain Harris, a member of the Army Reserve, traveled to a location 220 miles from his home to perform his work in the reserves in April 2013. File form 1040x online He incurred $1,549 of unreimbursed expenses consisting of $249 for mileage (440 miles × 56. File form 1040x online 5 cents per mile), $300 for meals, and $1,000 for lodging. File form 1040x online He also had other deductible mileage expenses of $110 for several trips to a location 20 miles from his home. File form 1040x online Only 50% of his meal expenses are deductible. File form 1040x online He shows his total deductible travel expenses of $1,509 ($249 + $150 (50% of $300) + $1,000 + $110) on Form 2106, line 10. File form 1040x online He enters the $1,399 ($249 + $150 + $1,000) for travel over 100 miles from home on Form 1040, line 24. File form 1040x online He then subtracts that $1,399 from the amount on Form 2106, $1,509, and enters $110 on Schedule A (Form 1040), line 21. File form 1040x online Individual Retirement Arrangements Generally, you can deduct the lesser of the contributions to your traditional individual retirement arrangement (IRA) for the year or the general limit (or spousal IRA limit, if applicable). File form 1040x online However, if you or your spouse was covered by an employer-maintained retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. File form 1040x online The Form W-2 you or your spouse receives from an employer has a box used to indicate whether you were covered for the year. File form 1040x online The “Retirement plan” box should have a mark in it if you were covered. File form 1040x online For purposes of a deduction for contributions to a traditional IRA, Armed Forces members (including reservists on active duty for more than 90 days during the year) are considered covered by an employer-maintained retirement plan. File form 1040x online Individuals serving in the U. File form 1040x online S. File form 1040x online Armed Forces or in support of the U. File form 1040x online S. File form 1040x online Armed Forces in designated combat zones have additional time to make a qualified retirement contribution to an IRA. File form 1040x online For more information on this extension of deadline provision, see Extension of Deadlines , later. File form 1040x online For more information on IRAs, see Publication 590. File form 1040x online Combat Pay For IRA purposes, your compensation includes nontaxable combat pay. File form 1040x online This means that even though you do not have to include the combat pay in your gross income, you do include it in your compensation when figuring the limits on contributions and deductions of contributions to IRAs. File form 1040x online Qualified Reservist Distributions A qualified reservist distribution is defined below. File form 1040x online It is not subject to the 10% additional tax on early distributions from certain retirement plans. File form 1040x online Definition. File form 1040x online   A distribution you receive is a qualified reservist distribution if the following requirements are met. File form 1040x online You were ordered or called to active duty after September 11, 2001. File form 1040x online You were ordered or called to active duty for a period of more than 179 days or for an indefinite period because you are a member of a reserve component (see Member of a reserve component , earlier, under Armed Forces Reservists. File form 1040x online ) The distribution is from an IRA or from amounts attributable to elective deferrals under a section 401(k) or 403(b) plan or a similar arrangement. File form 1040x online The distribution was made no earlier than the date of the order or call to active duty and no later than the close of the active duty period. File form 1040x online Qualified Reservist Repayments You may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined earlier) you received. File form 1040x online You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. File form 1040x online You make these repayment contributions to an IRA, even if you received the qualified reservist distribution from a section 401(k) or 403(b) plan or a similar arrangement. File form 1040x online Limit. File form 1040x online   Your qualified reservist repayments cannot be more than your qualified reservist distributions. File form 1040x online When repayment contributions can be made. File form 1040x online   You cannot make these repayment contributions after the date that is 2 years after your active duty period ends. File form 1040x online No deduction. File form 1040x online   You cannot deduct qualified reservist repayments. File form 1040x online Figuring your IRA deduction. File form 1040x online   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. File form 1040x online Reporting the repayment. File form 1040x online   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606, Nondeductible IRAs. File form 1040x online Moving Expenses To deduct moving expenses, you generally must meet certain time and distance tests. File form 1040x online However, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet these tests. File form 1040x online You can deduct your unreimbursed moving expenses on Form 3903. File form 1040x online Permanent change of station. File form 1040x online   A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. File form 1040x online The move must occur within 1 year of ending your active duty or within the period allowed under the Joint Federal Travel Regulations. File form 1040x online Spouse and dependents. File form 1040x online   If you are the spouse or dependent of a member of the Armed Forces who deserts, is imprisoned, or dies, a permanent change of station for you includes a move to: The member's place of enlistment or induction, Your, or the member's, home of record, or A nearer point in the United States. File form 1040x online   If the military moves you to or from a different location than the member, the moves are treated as a single move to your new main job location. File form 1040x online Services or reimbursements provided by the government. File form 1040x online   Do not include in your income the value of moving and storage services provided by the government because of a permanent change of station. File form 1040x online Similarly, do not include in income amounts received as a dislocation allowance, temporary lodging expense, temporary lodging allowance, or move-in housing allowance. File form 1040x online   Generally, if the total reimbursements or allowances that you receive from the government because of the move are more than your actual moving expenses, the excess is included in your wages on Form W-2. File form 1040x online However, if any reimbursements or allowances (other than dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances) exceed the cost of moving and the excess is not included in your wages on Form W-2, the excess still must be included in gross income on Form 1040, line 7. File form 1040x online   Use Form 3903 to deduct qualified expenses that exceed your reimbursements and allowances (including dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances that are excluded from gross income). File form 1040x online   If you must relocate and your spouse and dependents move to or from a different location, do not include in income reimbursements, allowances, or the value of moving and storage services provided by the government to move you and your spouse and dependents to and from the separate locations. File form 1040x online   Do not deduct any expenses for moving services that were provided by the government. File form 1040x online Also, do not deduct any expenses that were reimbursed by an allowance you did not include in income. File form 1040x online Deductible Moving Expenses If you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household. File form 1040x online You can deduct expenses (if not reimbursed or furnished in kind) for: Moving household goods and personal effects, and Travel. File form 1040x online Moving household goods and personal effects. File form 1040x online   You can deduct the expenses of moving your household goods and personal effects, including expenses for hauling a trailer, packing, crating, in-transit storage, and insurance. File form 1040x online You cannot deduct expenses for moving furniture or other goods you bought on the way from your old home to your new home. File form 1040x online Storing and insuring household goods and personal effects. File form 1040x online   You can include only the cost of storing and insuring your household goods and personal effects within any period of 30 consecutive days after the day these goods and effects are moved from your former home and before they are delivered to your new home. File form 1040x online Travel. File form 1040x online   You can deduct the expenses of traveling (including lodging but not meals) from your old home to your new home, including car expenses and air fare. File form 1040x online You can deduct as car expenses either: Your actual out-of-pocket expenses such as gas and oil, or The standard mileage rate of 24 cents a mile. File form 1040x online   You can add parking fees and tolls to the amount claimed under either method. File form 1040x online You cannot deduct any expenses for meals. File form 1040x online You cannot deduct the cost of unnecessary side trips or lavish and extravagant lodging. File form 1040x online Member of your household. File form 1040x online   A member of your household is anyone who has both your former home and your new home as his or her main home. File form 1040x online It does not include a tenant or employee unless you can claim that person as a dependent. File form 1040x online Foreign Moves A foreign move is a move from the United States or its possessions to a foreign country or from one foreign country to another foreign country. File form 1040x online A move from a foreign country to the United States or its possessions is not a foreign move. File form 1040x online For a foreign move, the deductible moving expenses described earlier are expanded to include the reasonable expenses of: Moving your household goods and personal effects to and from storage, and Storing these items for part or all of the time the new job location remains your main job location. File form 1040x online The new job location must be outside the United States. File form 1040x online Reporting Moving Expenses Figure moving expense deductions on Form 3903. File form 1040x online Carry the deduction from Form 3903 to Form 1040, line 26. File form 1040x online For more information, see Publication 521 and Form 3903. File form 1040x online Combat Zone Exclusion If you are a member of the U. File form 1040x online S. File form 1040x online Armed Forces who serves in a combat zone (defined later), you can exclude certain pay from your income. File form 1040x online This pay is generally referred to as “combat pay. File form 1040x online ” You do not actually need to show the exclusion on your tax return because income that qualifies for the combat zone exclusion is not included in the wages reported on your Form W-2. File form 1040x online (See Form W-2 , later. File form 1040x online ) The month for which you receive the pay must be a month in which you either served in a combat zone or were hospitalized as a result of wounds, disease, or injury incurred while serving in the combat zone. File form 1040x online You do not have to receive the excluded pay while you are in a combat zone, are hospitalized, or in the same year you served in a combat zone. File form 1040x online If you are an enlisted member, warrant officer, or commissioned warrant officer, you can exclude the following amounts from your income. File form 1040x online (Other officer personnel are discussed under Amount of Exclusion , later. File form 1040x online ) Active duty pay earned in any month you served in a combat zone. File form 1040x online Imminent danger/hostile fire pay. File form 1040x online A reenlistment bonus if the voluntary extension or reenlistment occurs in a month you served in a combat zone. File form 1040x online Pay for accrued leave earned in any month you served in a combat zone. File form 1040x online The Department of Defense must determine that the unused leave was earned during that period. File form 1040x online Pay received for duties as a member of the Armed Forces in clubs, messes, post and station theaters, and other nonappropriated fund activities. File form 1040x online The pay must be earned in a month you served in a combat zone. File form 1040x online Awards for suggestions, inventions, or scientific achievements you are entitled to because of a submission you made in a month you served in a combat zone. File form 1040x online Student loan repayments. File form 1040x online If the entire year of service required to earn the repayment was performed in a combat zone, the entire repayment made because of that year of service is excluded. File form 1040x online If only part of that year of service was performed in a combat zone, only part of the repayment qualifies for exclusion. File form 1040x online For example, if you served in a combat zone for 5 months, 5/12 of your repayment qualifies for exclusion. File form 1040x online Retirement pay and pensions do not qualify for the combat zone exclusion. File form 1040x online Partial (month) service. File form 1040x online   If you serve in a combat zone for any part of one or more days during a particular month, you are entitled to an exclusion for that entire month. File form 1040x online Form W-2. File form 1040x online   The wages shown in box 1 of your 2013 Form W-2 should not include military pay excluded from your income under the combat zone exclusion provisions. File form 1040x online If it does, you will need to get a corrected Form W-2 from your finance office. File form 1040x online   You cannot exclude as combat pay any wages shown in box 1 of Form W-2. File form 1040x online Combat Zone A combat zone is any area the President of the United States designates by Executive Order as an area in which the U. File form 1040x online S. File form 1040x online Armed Forces are engaging or have engaged in combat. File form 1040x online An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive Order. File form 1040x online Afghanistan area. File form 1040x online   By Executive Order No. File form 1040x online 13239, Afghanistan (and airspace above) was designated as a combat zone beginning September 19, 2001. File form 1040x online On December 14, 2001, the following countries were certified by the Department of Defense for combat zone tax benefits due to their direct support of military operations in the Afghanistan combat zone. File form 1040x online Djibouti. File form 1040x online Jordan. File form 1040x online Kyrgyzstan. File form 1040x online Pakistan. File form 1040x online Somalia. File form 1040x online Syria. File form 1040x online Tajikistan. File form 1040x online Uzbekistan. File form 1040x online Yemen. File form 1040x online The Philippines. File form 1040x online  Note. File form 1040x online For the Philippines only, the personnel must be deployed in conjunction with Operation Enduring Freedom supporting military operations in the Afghanistan combat zone. File form 1040x online The Kosovo area. File form 1040x online   By Executive Order No. File form 1040x online 13119, the following locations (including airspace above) were designated as a combat zone beginning March 24, 1999. File form 1040x online Federal Republic of Yugoslavia (Serbia/Montenegro). File form 1040x online Albania. File form 1040x online Kosovo. File form 1040x online The Adriatic Sea. File form 1040x online The Ionian Sea—north of the 39th parallel. File form 1040x online Note. File form 1040x online The combat zone designation for Montenegro and Kosovo (previously a province within Serbia) under Executive Order 13119 remains in force even though Montenegro and Kosovo became independent nations since EO 13119 was signed. File form 1040x online Arabian peninsula. File form 1040x online   By Executive Order No. File form 1040x online 12744, the following locations (and airspace above) were designated as a combat zone beginning January 17, 1991. File form 1040x online The Persian Gulf. File form 1040x online The Red Sea. File form 1040x online The Gulf of Oman. File form 1040x online The part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude. File form 1040x online The Gulf of Aden. File form 1040x online The total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. File form 1040x online Jordan which is in direct support of the Arabian Peninsula. File form 1040x online Serving in a Combat Zone You are considered to be serving in a combat zone if you are either assigned on official temporary duty to a combat zone or you qualify for hostile fire/imminent danger pay while in a combat zone. File form 1040x online Service in a combat zone includes any periods you are absent from duty because of sickness, wounds, or leave. File form 1040x online If, as a result of serving in a combat zone, a person becomes a prisoner of war or is missing in action, that person is considered to be serving in the combat zone so long as he or she keeps that status for military pay purposes. File form 1040x online Hospitalized While Serving in a Combat Zone If you are hospitalized while serving in a combat zone, the wound, disease, or injury causing the hospitalization will be presumed to have been incurred while serving in the combat zone unless there is clear evidence to the contrary. File form 1040x online Example. File form 1040x online You are hospitalized for a specific disease in a combat zone where you have been serving for 3 weeks, and the disease for which you are hospitalized has an incubation period of 2 to 4 weeks. File form 1040x online The disease is presumed to have been incurred while you were serving in the combat zone. File form 1040x online On the other hand, if the incubation period of the disease is 1 year, the disease would not have been incurred while you were serving in the combat zone. File form 1040x online Hospitalized After Leaving a Combat Zone In some cases, the wound, disease, or injury may have been incurred while you were serving in the combat zone, even though you were not hospitalized until after you left. File form 1040x online In that case, you can exclude military pay earned while you are hospitalized as a result of the wound, disease, or injury. File form 1040x online Example. File form 1040x online You were hospitalized for a specific disease 3 weeks after you left the combat zone. File form 1040x online The incubation period of the disease is from 2 to 4 weeks. File form 1040x online The disease is presumed to have been incurred while serving in the combat zone. File form 1040x online Nonqualifying Presence in Combat Zone None of the following types of military service qualify as service in a combat zone. File form 1040x online Presence in a combat zone while on leave from a duty station located outside the combat zone. File form 1040x online Passage over or through a combat zone during a trip between two points that are outside a combat zone. File form 1040x online Presence in a combat zone solely for your personal convenience. File form 1040x online Service Outside Combat Zone Considered Service in Combat Zone Military service outside a combat zone is considered to be performed in a combat zone if: The Department of Defense designates that the service is in direct support of military operations in the combat zone, and The service qualifies you for special military pay for duty subject to hostile fire or imminent danger. File form 1040x online Military pay received for this service will qualify for the combat zone exclusion if all of the requirements (other than service in a combat zone) are met and the pay is verifiable by reference to military pay records. File form 1040x online Amount of Exclusion If you are an enlisted member, warrant officer, or commissioned warrant officer and you serve in a combat zone during any part of a month, you can exclude all of your military pay for that month. File form 1040x online It should not be included in the wages reported on your Form W-2. File form 1040x online You also can exclude military pay earned while you are hospitalized as a result of wounds, disease, or injury incurred in the combat zone. File form 1040x online If you are hospitalized, you cannot exclude any military pay received for any month of service that begins more than 2 years after the end of combat activities in the combat zone. File form 1040x online Your hospitalization does not have to be in the combat zone. File form 1040x online If you are a commissioned officer (other than a commissioned warrant officer), you can exclude your pay according to the rules just discussed. File form 1040x online However, the amount of your exclusion is limited to the highest rate of enlisted pay (plus imminent danger/hostile fire pay you received) for each month during any part of which you served in a combat zone or were hospitalized as a result of your service there. File form 1040x online Alien Status For tax purposes, an alien is an individual who is not a U. File form 1040x online S. File form 1040x online citizen. File form 1040x online An alien is in one of three categories: resident, nonresident, or dual-status. File form 1040x online Placement in the correct category is crucial in determining what income to report and what forms to file. File form 1040x online Under peacetime enlistment rules, you generally cannot enlist in the Armed Forces unless you are a citizen or have been legally admitted to the United States for permanent residence. File form 1040x online If you are an alien enlistee in the Armed Forces, you are probably a resident alien. File form 1040x online If, under an income tax treaty, you are considered a resident of a foreign country, see your base legal officer. File form 1040x online Other aliens who are in the United States only because of military assignments and who have a home outside the United States are nonresident aliens. File form 1040x online Guam and Puerto Rico have special rules. File form 1040x online Residents of those areas should contact their taxing authority with their questions. File form 1040x online Most members of the Armed Forces are U. File form 1040x online S. File form 1040x online citizens or resident aliens. File form 1040x online However, if you have questions about your alien status or the alien status of your dependents or spouse, you should read the information in the following paragraphs and see Publication 519. File form 1040x online Resident Aliens You are considered a resident alien of the United States for tax purposes if you meet either the “green card test” or the “substantial presence test” for the calendar year (January 1–December 31). File form 1040x online If you meet the substantial presence test for 2014, you did not meet either the green card test or the substantial presence test for 2012 or 2013, and you did not choose to be treated as a resident for part of 2012, you may be able to choose to be treated as a U. File form 1040x online S. File form 1040x online resident for part of 2013. File form 1040x online See First-Year Choice in Publication 519. File form 1040x online These tests are explained in Publication 519. File form 1040x online Generally, resident aliens are taxed on their worldwide income and file the same tax forms as U. File form 1040x online S. File form 1040x online citizens. File form 1040x online Treating nonresident alien spouse as resident alien. File form 1040x online   A nonresident alien spouse can be treated as a resident alien if all the following conditions are met. File form 1040x online One spouse is a U. File form 1040x online S. File form 1040x online citizen or resident alien at the end of the tax year. File form 1040x online That spouse is married to the nonresident alien at the end of the tax year. File form 1040x online You both choose to treat the nonresident alien spouse as a resident alien. File form 1040x online Making the choice. File form 1040x online   Both you and your spouse must sign a statement and attach it to your joint return for the first tax year for which the choice applies. File form 1040x online Include in the statement: A declaration that one spouse was a nonresident alien and the other was a U. File form 1040x online S. File form 1040x online citizen or resident alien on the last day of the year, A declaration that both spouses choose to be treated as U. File form 1040x online S. File form 1040x online residents for the entire tax year, and The name, address, and taxpayer identification number (social security number or individual taxpayer identification number) of each spouse. File form 1040x online If the nonresident alien spouse is not eligible to get a social security number, he or she should file Form W-7, Application for IRS Individual Taxpayer Identification Number. File form 1040x online    Once you make this choice, the nonresident alien spouse's worldwide income is subject to U. File form 1040x online S. File form 1040x online tax. File form 1040x online If the nonresident alien spouse has substantial foreign income, there may be no advantage to making this choice. File form 1040x online Ending the choice. File form 1040x online   Once you make this choice, it applies to all later years unless one of the following situations occurs. File form 1040x online You or your spouse revokes the choice. File form 1040x online You or your spouse dies. File form 1040x online You and your spouse become legally separated under a decree of divorce or separate maintenance. File form 1040x online The Internal Revenue Service ends the choice because you or your spouse kept inadequate records. File form 1040x online For specific details on these situations, see Publication 519. File form 1040x online   If the choice is ended for any of these reasons, neither spouse can make the choice for any later year. File form 1040x online Choice not made. File form 1040x online   If you and your nonresident alien spouse do not make this choice: You cannot file a joint return. File form 1040x online You can file as married filing separately, or head of household if you qualify. File form 1040x online You can claim an exemption for your nonresident alien spouse if he or she has no gross income for U. File form 1040x online S. File form 1040x online tax purposes and is not another taxpayer's dependent. File form 1040x online The nonresident alien spouse generally does not have to file a federal income tax return if he or she had no income from sources in the United States. File form 1040x online If a return has to be filed, see the next discussion. File form 1040x online The nonresident alien spouse is not eligible for the earned income credit if he or she has to file a return. File form 1040x online Nonresident Aliens If you are an alien who does not meet the requirements discussed earlier to be a resident alien, you are a nonresident alien. File form 1040x online If you are required to file a federal tax return, you must file either Form 1040NR, U. File form 1040x online S. File form 1040x online Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U. File form 1040x online S. File form 1040x online Income Tax Return for Certain Nonresident Aliens With No Dependents. File form 1040x online See the form instructions for information on who must file and filing status. File form 1040x online If you are a nonresident alien, you generally must pay tax on income from sources in the United States. File form 1040x online Your income from conducting a trade or business in the United States is taxed at graduated U. File form 1040x online S. File form 1040x online tax rates. File form 1040x online Other income from U. File form 1040x online S. File form 1040x online sources is taxed at a flat 30% (or lower treaty) rate. File form 1040x online For example, dividends from a U. File form 1040x online S. File form 1040x online corporation paid to a nonresident alien generally are subject to a 30% (or lower treaty) rate. File form 1040x online Dual-Status Aliens You can be both a nonresident and resident alien during the same tax year. File form 1040x online This usually occurs in the year you arrive in or depart from the United States. File form 1040x online If you are a dual-status alien, you are taxed on income from all sources for the part of the year you are a resident alien. File form 1040x online Generally, for the part of the year you are a nonresident alien, you are taxed only on income from sources in the United States. File form 1040x online Sale of Home You may not have to pay tax on all or part of the gain from the sale of your main home. File form 1040x online Usually, your main home is the one you live in most of the time. File form 1040x online It can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. File form 1040x online You generally can exclude up to $250,000 of gain ($500,000, in most cases, if married filing a joint return) realized on the sale or exchange of a main home in 2013. File form 1040x online The exclusion is allowed each time you sell or exchange a main home, but generally not more than once every 2 years. File form 1040x online To be eligible, during the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years (the ownership test), and lived in the home as your main home for at least 2 years (the use test). File form 1040x online Exception to ownership and use tests. File form 1040x online   You can exclude gain, but the maximum amount of gain you can exclude will be reduced if you do not meet the ownership and use tests due to a move to a new permanent duty station. File form 1040x online 5-year test period suspended. File form 1040x online   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty as a member of the Armed Forces. File form 1040x online This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. File form 1040x online Example. File form 1040x online David bought and moved into a home in 2005. File form 1040x online He lived in it as his main home for 2½ years. File form 1040x online For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. File form 1040x online He then sold the home at a gain in 2013. File form 1040x online To meet the use test, David chooses to suspend the 5-year test period for the 6 years he was on qualifying official extended duty. File form 1040x online This means he can disregard those 6 years. File form 1040x online Therefore, David's 5-year test period consists of the 5 years before he went on qualifying official extended duty. File form 1040x online He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. File form 1040x online Period of suspension. File form 1040x online   The period of suspension cannot last more than 10 years. File form 1040x online You cannot suspend the 5-year period for more than one property at a time. File form 1040x online You can revoke your choice to suspend the 5-year period at any time. File form 1040x online Qualified official extended duty. File form 1040x online   You are on qualified official extended duty if you serve on extended duty either: At a duty station at least 50 miles from your main home, or While you live in Government quarters under Government orders. File form 1040x online   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. File form 1040x online Property used for rental or business. File form 1040x online   You may be able to exclude your gain from the sale of a home that you have used as a rental property or for business. File form 1040x online However, you must meet the ownership and use tests discussed in Publication 523. File form 1040x online Nonqualified use. File form 1040x online   If the sale of your main home results in a gain that is allocated to one or more period(s) of nonqualified use, you cannot exclude that gain from your income. File form 1040x online   Nonqualified use means any period after 2008 when neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions. File form 1040x online For example, a period of nonqualified use does not include any period (not to exceed a total of 10 years) during which you or your spouse is serving on qualified official extended duty. File form 1040x online Loss. File form 1040x online   You cannot deduct a loss from the sale of your main home. File form 1040x online More information. File form 1040x online   For more information, see Publication 523. File form 1040x online Foreclosures There may be tax consequences as a result of compensation payments for foreclosures. File form 1040x online Payments made for violations of the Service Members Civil Relief Act (SCRA). File form 1040x online   All service members who received a settlement payment reported on a Form 1099 may need to report the amount on their tax return. File form 1040x online Generally, you must include settlement payments in income. File form 1040x online However, the tax treatment of settlement payments will depend on the facts and circumstances. File form 1040x online Lump Sum Portion of Settlement Payment. File form 1040x online    Generally, you must include the lump sum payment in gross income. File form 1040x online In limited circumstances you may be able to exclude part or all of the lump sum payment from gross income. File form 1040x online For example, you may qualify to exclude part or all of the payment from gross income if you can show that the payment was made to reimburse specific nondeductible expenses (such as living expenses) you incurred because of the SCRA violation. File form 1040x online Interest Payment on Lump Sum Portion of Settlement Payment. File form 1040x online    You must include any interest on the lump sum portion of your settlement payment in your income. File form 1040x online Lost Equity Portion of Settlement Payment. File form 1040x online    If you lost your main home in foreclosure, you should treat the lost equity payment as an additional amount you received on the foreclosure of the home. File form 1040x online You will have a gain on the foreclosure only if the sum of the lost equity payment and the value of the main home at foreclosure is more than what you paid for the home. File form 1040x online In many cases, this gain may be excluded from income. File form 1040x online For more information on the rules for excluding all or part of any gain from the sale (including a foreclosure) of a main home, see Pub. File form 1040x online 523, Selling Your Home. File form 1040x online The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. File form 1040x online    To find rules for reporting gain or loss on the foreclosure of property that was not your main home, see Pub. File form 1040x online 544, Sales and Other Dispositions of Assets. File form 1040x online Interest Payment on Lost Equity Portion of Settlement Payment. File form 1040x online    You must include any interest on the lost equity portion of your settlement payment in your income. File form 1040x online Itemized Deductions To figure your taxable income, you must subtract either your standard deduction or your itemized deductions from adjusted gross income. File form 1040x online For information on the standard deduction, see Publication 501. File form 1040x online Itemized deductions are figured on Schedule A (Form 1040). File form 1040x online This chapter discusses miscellaneous itemized deductions of particular interest to members of the Armed Forces. File form 1040x online For information on other itemized deductions, see the publications listed below. File form 1040x online Publication 502, Medical and Dental Expenses. File form 1040x online Publication 526, Charitable Contributions. File form 1040x online Publication 547, Casualties, Disasters, and Thefts. File form 1040x online Publication 550, Investment Income and Expenses. File form 1040x online You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. File form 1040x online For information on deductions that are not subject to the 2% limit, see Publication 529. File form 1040x online Employee Business Expenses Deductible employee business expenses generally are miscellaneous itemized deductions subject to the 2% limit. File form 1040x online Certain employee business expenses are deductible as adjustments to income. File form 1040x online For information on many employee business expenses, see Publication 463. File form 1040x online Generally, you must file Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses, to claim these expenses. File form 1040x online You do not have to file Form 2106 or Form 2106-EZ if you are claiming only unreimbursed expenses for uniforms, professional society dues, and work-related educational expenses (all discussed later). File form 1040x online You can deduct these expenses directly on Schedule A (Form 1040). File form 1040x online Reimbursement. File form 1040x online   Generally, to receive advances, reimbursements, or other allowances from the government, you must adequately account for your expenses and return any excess reimbursement. File form 1040x online Your reimbursed expenses are not deductible. File form 1040x online   If your expenses are more than your reimbursement, the excess expenses are deductible (subject to the 2% limit) if you can prove them. File form 1040x online You must file Form 2106 to report these expenses. File form 1040x online   You can use the shorter Form 2106-EZ if you meet all three of the following conditions. File form 1040x online You are an employee deducting expenses related to your job. File form 1040x online You were not reimbursed by your employer for your expenses. File form 1040x online (Amounts included in box 1 of Form W-2 are not considered reimbursements. File form 1040x online ) If you claim car expenses, you use the standard mileage rate. File form 1040x online    For 2013, the standard mileage rate is 56. File form 1040x online 5 cents a mile for all business miles driven. File form 1040x online This rate is adjusted periodically. File form 1040x online Travel Expenses You can deduct unreimbursed travel expenses only if they are incurred while you are traveling away from home. File form 1040x online If you are a member of the U. File form 1040x online S. File form 1040x online Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. File form 1040x online You cannot deduct your expenses for meals and lodging while at your permanent duty station. File form 1040x online 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 form 1040x online A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a home aboard ship for travel expense purposes. File form 1040x online To be deductible, your travel expenses must be work related. File form 1040x online You cannot deduct any expenses for personal travel, such as visits to family while on furlough, leave, or liberty. File form 1040x online Away from home. File form 1040x online   Home is your permanent duty station (which can be a ship or base), regardless of where you or your family live. File form 1040x online You are away from home if you are away from your permanent duty station substantially longer than an ordinary day's work and you need to get sleep or rest to meet the demands of your work while away from home. File form 1040x online   Examples of deductible travel expenses include: Expenses for business-related meals (generally limited to 50% of your unreimbursed cost), lodging, taxicabs, business telephone calls, tips, laundry, and dry cleaning while you are away from home on temporary duty or temporary additional duty, and Expenses of carrying out official business while on “No Cost” orders. File form 1040x online    You cannot deduct any expenses for travel away from home if the temporary assignment in a single location is realistically expected to last (and does in fact last) for more than 1 year. File form 1040x online This rule may not apply if you are participating in a federal crime investigation or prosecution. File form 1040x online For more information, see Publication 463 and the Form 2106 instructions. File form 1040x online Transportation Expenses These expenses include the ordinary and necessary costs of: Getting from one workplace to another when you are not away from home, Going to a business meeting away from your regular workplace, and Getting from your home to a temporary workplace when you have a regular place of work. File form 1040x online These expenses include the costs of transportation by air, bus, rail, taxi, and driving and maintaining your car. File form 1040x online Transportation expenses incurred while traveling away from home are included with your travel expenses, discussed earlier. File form 1040x online However, if you use your car while traveling away from home overnight, see the rules in chapter 4 of Publication 463 to figure your car expense deduction. File form 1040x online If you must go from one workplace to another while on duty (for example, as a courier or to attend meetings) without being away from home, your unreimbursed transportation expenses are deductible. File form 1040x online However, the expenses of getting to and from your regular place of work (commuting) are not deductible. File form 1040x online Temporary work location. File form 1040x online   If you have one or more regular places of business away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location. File form 1040x online   Generally, if your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary. File form 1040x online   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. File form 1040x online If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. File form 1040x online    If you do not have a regular place of business, but you ordinarily work in the metropolitan area where you live, you can deduct daily transportation expenses between your home and a temporary work site outside your metropolitan area. File form 1040x online However, you cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. File form 1040x online These are nondeductible commuting costs. File form 1040x online Armed Forces reservists. File form 1040x online   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. File form 1040x online You can deduct the expense of getting from one workplace to the other. File form 1040x online You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. File form 1040x online In this case, your transportation generally is a nondeductible commuting expense. File form 1040x online However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. File form 1040x online   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. File form 1040x online If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. File form 1040x online See Armed Forces Reservists under Adjustments to Income, earlier. File form 1040x online Uniforms You usually cannot deduct the expenses for uniform cost and upkeep. File form 1040x online Generally, you must wear uniforms when on duty and you are allowed to wear them when off duty. File form 1040x online If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of the uniforms, but you must reduce your expenses by any allowance or reimbursement you receive. File form 1040x online Unreimbursed expenses for the cost and upkeep of the following articles are deductible. File form 1040x online Military battle dress uniforms and utility uniforms that you cannot wear when off duty. File form 1040x online Articles not replacing regular clothing, including insignia of rank, corps devices, epaulets, aiguillettes, and swords. File form 1040x online Reservists' uniforms if you can wear the uniform only while performing duties as a reservist. File form 1040x online Professional Dues You can deduct unreimbursed dues paid to professional societies directly related to your military position. File form 1040x online However, you cannot deduct amounts paid to an officers' club or a noncommissioned officers' club. File form 1040x online Example. File form 1040x online Lieutenant Margaret Allen, an electrical engineer at Maxwell Air Force Base, can deduct professional dues paid to the American Society of Electrical Engineers. File form 1040x online Educational Expenses You can deduct the unreimbursed costs of qualifying work-related education. File form 1040x online This is education that meets at least one of the following two tests. File form 1040x online The education is required by your employer or the law to keep your present salary, status, or job. File form 1040x online The required education must serve a bona fide business purpose of your employer. File form 1040x online The education maintains or improves skills needed in your present work. File form 1040x online However, even if the education meets one or both of the above tests, it is not qualifying education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. File form 1040x online You can deduct the expenses for qualifying work-related education even if the education could lead to a degree. File form 1040x online Example 1. File form 1040x online Lieutenant Colonel Mason has a degree in financial management and is in charge of base finances at her post of duty. File form 1040x online She took an advanced finance course. File form 1040x online She already meets the minimum qualifications for her job. File form 1040x online By taking the course, she is improving skills in her current position. File form 1040x online The course does not qualify her for a new trade or business. File form 1040x online She can deduct educational expenses that are more than the educational allowance she received. File form 1040x online Example 2. File form 1040x online Major Williams worked in the military base legal office as a legal intern. File form 1040x online He was placed in excess leave status by his employer to attend law school. File form 1040x online He paid all his educational expenses and was not reimbursed. File form 1040x online After obtaining his law degree, he passed the state bar exam and worked as a judge advocate. File form 1040x online His educational expenses are not deductible because the law degree qualified him for a new trade or business, even though the education maintained and improved his skills in his work. File form 1040x online Travel to obtain education. File form 1040x online   If your work-related education qualifies, you can deduct the costs of travel, including meals (subject to the 50% limit), and lodging, if the main purpose of the trip is to obtain the education. File form 1040x online   You cannot deduct the cost of travel that is itself a form of education, even if it is directly related to your duties in your work or business. File form 1040x online Transportation for education. File form 1040x online   If your work-related education qualifies for a deduction, you can deduct the costs of transportation to obtain that education. File form 1040x online However, you cannot deduct the cost of services provided in kind, such as base-provided transportation to or from class. File form 1040x online Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. File form 1040x online   If you need more information on educational expenses, see Publication 970. File form 1040x online Repayments If you had to repay to your employer an amount that you included in your income in an earlier year, you may be able to deduct the repaid amount from your income for the year in which you repaid it. File form 1040x online Repayment of $3,000 or less. File form 1040x online   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. File form 1040x online If you reported it as wages, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. File form 1040x online Repayment over $3,000. File form 1040x online   If the amount you repaid was more than $3,000, see Repayments in Publication 525. File form 1040x online Credits After you have figured your taxable income and tax liability, you can determine if you are entitled to any tax credits. File form 1040x online This publication discusses the first-time homebuyer credit, child tax credit, earned income credit, and credit for excess social security tax withheld. File form 1040x online For information on other credits, see your tax form instructions. File form 1040x online First-Time Homebuyer Credit The first-time homebuyer credit is not available for homes purchased after 2011. File form 1040x online In 2011, this credit had already expired for most taxpayers, however, certain members of the uniformed services and Foreign Service and certain employees of the intelligence community could claim the credit for homes purchased in 2011. File form 1040x online If you bought the home (and claimed the credit) after 2008, you generally must repay the credit if you dispose of the home or the home stops being your main home within the 36-month period beginning on the purchase date. File form 1040x online If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit. File form 1040x online If you bought your home in 2008, you generally must repay the credit over a 15-year period in 15 equal installments. File form 1040x online For more information, see Form 5405, Repayment of the First-Time Homebuyer Credit, and its instructions. File form 1040x online Child Tax Credit The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. File form 1040x online The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit. File form 1040x online The child tax credit is not the same as the credit for child and dependent care expenses. File form 1040x online See Publication 503 for information on the credit for child and dependent care expenses. File form 1040x online Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you, later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. File form 1040x online S. File form 1040x online citizen, a U. File form 1040x online S. File form 1040x online national, or a U. File form 1040x online S. File form 1040x online resident alien. File form 1040x online If the child was adopted, see Adopted child . File form 1040x online For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c, column (4). File form 1040x online Exceptions to time lived with you. File form 1040x online   A child is considered to have lived with you for all of 2013 if the child was born or died in 2013 and your home was this child's home for the entire time he or she was alive. File form 1040x online Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. File form 1040x online   There are also exceptions for kidnapped children and children of divorced or separated parents. File form 1040x online For details, see Publication 501. File form 1040x online Qualifying child of more than one person. File form 1040x online   A special rule applies if your qualifying child is the qualifying child of more than one person. File form 1040x online For details, see Publication 501. File form 1040x online Adopted child. File form 1040x online   An adopted child is always treated as your own child. File form 1040x online An adopted child includes a child lawfully placed with you for legal adoption. File form 1040x online   If you are a U. File form 1040x online S. File form 1040x online citizen or U. File form 1040x online S. File form 1040x online national and your adopted child lived with you as a member of your household all year, that child meets condition (7) above to be a qualifying child for the child tax credit. File form 1040x online Amount of Credit The maximum amount you can claim for the credit is $1,000 for each qualifying child. File form 1040x online Limits on the credit. File form 1040x online   You must reduce your child tax credit if either (1) or (2), below, applies. File form 1040x online The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. File form 1040x online If the amount is zero, you cannot take this credit because there is no tax to reduce. File form 1040x online However, you may be able to take the additional child tax credit. File form 1040x online See Additional Child Tax Credit , later. File form 1040x online Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. File form 1040x online Married filing jointly — $110,000. File form 1040x online Single, head of household,  or qualifying widow(er) — $75,000. File form 1040x online Married filing separately — $55,000. File form 1040x online Modified AGI. File form 1040x online   For purposes of the child tax credit, your modified AGI is the amount on Form 1040, line 38, or Form 1040A, line 22, plus the following amounts that may apply to you. File form 1040x online Any amount excluded from income because of the exclusion of income from Puerto Rico. File form 1040x online Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. File form 1040x online Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. File form 1040x online Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. File form 1040x online   If you do not have any of the above, your modified AGI is the same as your AGI. File form 1040x online Claiming the Credit To claim the child tax credit, you must file Form 1040 or Form 1040A. File form 1040x online For more information on the child tax credit, see the instructions for Form 1040 or Form 1040A. File form 1040x online Also attach Schedule 8812, Child Tax Credit, if required. File form 1040x online Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. File form 1040x online The additional child tax credit may give you a refund even if you do not owe any tax. File form 1040x online For more information, see the instructions for Form 1040 or Form 1040A, and Schedule 8812. File form 1040x online Earned Income Credit The earned income credit (EIC) is a cr
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The File Form 1040x Online

File form 1040x online Publication 525 - Main Content Table of Contents Employee CompensationBabysitting. File form 1040x online Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Business and Investment IncomeRents From Personal Property Royalties Partnership Income S Corporation Income Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Miscellaneous IncomeBartering Canceled Debts Host or Hostess Life Insurance Proceeds Recoveries Survivor Benefits Unemployment Benefits Welfare and Other Public Assistance Benefits Other Income RepaymentsMethod 1. File form 1040x online Method 2. File form 1040x online How To Get Tax HelpLow Income Taxpayer Clinics Employee Compensation In most cases, you must include in gross income everything you receive in payment for personal services. File form 1040x online In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. File form 1040x online You should receive a Form W-2 from your employer or former employer showing the pay you received for your services. File form 1040x online Include all your pay on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ, even if you do not receive Form W-2, or you receive a Form W-2 that does not include all pay that should be included on the Form W-2. File form 1040x online If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. File form 1040x online These wages must be included on line 7 of Form 1040. File form 1040x online See Form 8919 for more information. File form 1040x online Childcare providers. File form 1040x online   If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. File form 1040x online If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. File form 1040x online You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. File form 1040x online Babysitting. File form 1040x online   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. File form 1040x online Bankruptcy. File form 1040x online   If you filed for bankruptcy under Chapter 11 of the Bankruptcy Code, you must allocate your wages and withheld income tax. File form 1040x online Your W-2 will show your total wages and withheld income tax for the year. File form 1040x online On your tax return, you report the wages and withheld income tax for the period before you filed for bankruptcy. File form 1040x online Your bankruptcy estate reports the wages and withheld income tax for the period after you filed for bankruptcy. File form 1040x online If you receive other information returns (such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income) that report gross income to you, rather than to the bankruptcy estate, you must allocate that income. File form 1040x online   The only exception is for purposes of figuring your self-employment tax, if you are self-employed. File form 1040x online For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. File form 1040x online   You must file a statement with your income tax return stating you filed a Chapter 11 bankruptcy case. File form 1040x online The statement must show the allocation and describe the method used to make the allocation. File form 1040x online For a sample of this statement and other information, see Notice 2006-83, 2006-40 I. File form 1040x online R. File form 1040x online B. File form 1040x online 596, available at www. File form 1040x online irs. File form 1040x online gov/irb/2006-40_IRB/ar12. File form 1040x online html. File form 1040x online Miscellaneous Compensation This section discusses many types of employee compensation. File form 1040x online The subjects are arranged in alphabetical order. File form 1040x online Advance commissions and other earnings. File form 1040x online   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. File form 1040x online    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. File form 1040x online If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), Itemized Deductions, or you may be able to take a credit for that year. File form 1040x online See Repayments , later. File form 1040x online Allowances and reimbursements. File form 1040x online    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. File form 1040x online If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. File form 1040x online Back pay awards. File form 1040x online   Include in income amounts you are awarded in a settlement or judgment for back pay. File form 1040x online These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. File form 1040x online They should be reported to you by your employer on Form W-2. File form 1040x online Bonuses and awards. File form 1040x online    Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. File form 1040x online These include prizes such as vacation trips for meeting sales goals. File form 1040x online If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. File form 1040x online However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. File form 1040x online Employee achievement award. File form 1040x online   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. File form 1040x online However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. File form 1040x online Your employer can tell you whether your award is a qualified plan award. File form 1040x online Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. File form 1040x online   However, the exclusion does not apply to the following awards. File form 1040x online A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. File form 1040x online A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. File form 1040x online Example. File form 1040x online Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. File form 1040x online Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. File form 1040x online However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 − $1,600) in his income. File form 1040x online Differential wage payments. File form 1040x online   This is any payment made by an employer to an individual for any period during which the individual is, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages the individual would have received from the employer for that period. File form 1040x online These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. File form 1040x online The payments are reported as wages on Form W-2. File form 1040x online Government cost-of-living allowances. File form 1040x online   Most payments received by U. File form 1040x online S. File form 1040x online Government civilian employees for working abroad are taxable. File form 1040x online However, certain cost-of-living allowances are tax free. File form 1040x online Publication 516, U. File form 1040x online S. File form 1040x online Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. File form 1040x online Nonqualified deferred compensation plans. File form 1040x online   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. File form 1040x online This amount is shown on Form W-2, box 12, using code Y. File form 1040x online This amount is not included in your income. File form 1040x online   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. File form 1040x online This amount is included in your wages shown on Form W-2, box 1. File form 1040x online It is also shown on Form W-2, box 12, using code Z. File form 1040x online Nonqualified deferred compensation plans of nonqualified entities. File form 1040x online   In most cases, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. File form 1040x online For this purpose, a nonqualified entity is: A foreign corporation unless substantially all of its income is: Effectively connected with the conduct of a trade or business in the United States, or Subject to a comprehensive foreign income tax. File form 1040x online A partnership unless substantially all of its income is allocated to persons other than: Foreign persons for whom the income is not subject to a comprehensive foreign income tax, and Tax-exempt organizations. File form 1040x online Note received for services. File form 1040x online   If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. File form 1040x online When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. File form 1040x online Do not include that part again in your income. File form 1040x online Include the rest of the payment in your income in the year of payment. File form 1040x online   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. File form 1040x online Severance pay. File form 1040x online   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. File form 1040x online Accrued leave payment. File form 1040x online   If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. File form 1040x online   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. File form 1040x online You can reduce gross wages by the amount you repaid in the same tax year in which you received it. File form 1040x online Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on your return and the wages on your Forms W-2. File form 1040x online Outplacement services. File form 1040x online   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. File form 1040x online    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). File form 1040x online Sick pay. File form 1040x online   Pay you receive from your employer while you are sick or injured is part of your salary or wages. File form 1040x online In addition, you must include in your income sick pay benefits received from any of the following payers. File form 1040x online A welfare fund. File form 1040x online A state sickness or disability fund. File form 1040x online An association of employers or employees. File form 1040x online An insurance company, if your employer paid for the plan. File form 1040x online However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. File form 1040x online For more information, see Other Sickness and Injury Benefits under Sickness and Injury Benefits, later. File form 1040x online Social security and Medicare taxes paid by employer. File form 1040x online   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. File form 1040x online The payment is also treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. File form 1040x online However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. File form 1040x online Stock appreciation rights. File form 1040x online   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. File form 1040x online When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. File form 1040x online You include the cash payment in income in the year you use the right. File form 1040x online Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. File form 1040x online Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. File form 1040x online See Valuation of Fringe Benefits , later in this discussion, for information on how to determine the amount to include in income. File form 1040x online Recipient of fringe benefit. File form 1040x online   You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided. File form 1040x online You are considered to be the recipient even if it is given to another person, such as a member of your family. File form 1040x online An example is a car your employer gives to your spouse for services you perform. File form 1040x online The car is considered to have been provided to you and not to your spouse. File form 1040x online   You do not have to be an employee of the provider to be a recipient of a fringe benefit. File form 1040x online If you are a partner, director, or independent contractor, you also can be the recipient of a fringe benefit. File form 1040x online Provider of benefit. File form 1040x online   Your employer or another person for whom you perform services is the provider of a fringe benefit regardless of whether that person actually provides the fringe benefit to you. File form 1040x online The provider can be a client or customer of an independent contractor. File form 1040x online Accounting period. File form 1040x online   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. File form 1040x online Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. File form 1040x online The general rule: benefits are reported for a full calendar year (January 1–December 31). File form 1040x online The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. File form 1040x online For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. File form 1040x online Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. File form 1040x online   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). File form 1040x online Form W-2. File form 1040x online   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. File form 1040x online Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). File form 1040x online However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). File form 1040x online Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. File form 1040x online Benefits you receive from the plan may be taxable, as explained, later, under Sickness and Injury Benefits . File form 1040x online For information on the items covered in this section, other than Long-term care coverage , see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. File form 1040x online Long-term care coverage. File form 1040x online   Contributions by your employer to provide coverage for long-term care services generally are not included in your income. File form 1040x online However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. File form 1040x online This amount will be reported as wages in box 1 of your Form W-2. File form 1040x online Archer MSA contributions. File form 1040x online    Contributions by your employer to your Archer MSA generally are not included in your income. File form 1040x online Their total will be reported in box 12 of Form W-2, with code R. File form 1040x online You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. File form 1040x online File the form with your return. File form 1040x online Health flexible spending arrangement (health FSA). File form 1040x online   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. File form 1040x online   Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. File form 1040x online The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. File form 1040x online For more information, see Notice 2012-40, 2012-26 I. File form 1040x online R. File form 1040x online B. File form 1040x online 1046, available at www. File form 1040x online irs. File form 1040x online gov/irb/2012-26 IRB/ar09. File form 1040x online html. File form 1040x online Health reimbursement arrangement (HRA). File form 1040x online   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. File form 1040x online Health savings accounts (HSA). File form 1040x online   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. File form 1040x online Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. File form 1040x online Contributions made by your employer are not included in your income. File form 1040x online Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. File form 1040x online Distributions not used for qualified medical expenses are included in your income. File form 1040x online See Publication 969 for the requirements of an HSA. File form 1040x online   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. File form 1040x online The contributions are treated as a distribution of money and are not included in the partner's gross income. File form 1040x online Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. File form 1040x online In both situations, the partner can deduct the contribution made to the partner's HSA. File form 1040x online   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. File form 1040x online The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. File form 1040x online Qualified HSA funding distribution. File form 1040x online   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. File form 1040x online See Publication 590, Individual Retirement Arrangements (IRAs), for the requirements for these qualified HSA funding distributions. File form 1040x online Failure to maintain eligibility. File form 1040x online   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. File form 1040x online If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. File form 1040x online This income is also subject to an additional 10% tax. File form 1040x online Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. File form 1040x online See Instructions for Form 8839, Qualified Adoption Expenses, for more information. File form 1040x online Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. File form 1040x online They also are included as social security and Medicare wages in boxes 3 and 5. File form 1040x online However, they are not included as wages in box 1. File form 1040x online To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. File form 1040x online File the form with your return. File form 1040x online Athletic Facilities If your employer provides you with the free or low-cost use of an employer-operated gym or other athletic club on your employer's premises, the value is not included in your compensation. File form 1040x online The gym must be used primarily by employees, their spouses, and their dependent children. File form 1040x online If your employer pays for a fitness program provided to you at an off-site resort hotel or athletic club, the value of the program is included in your compensation. File form 1040x online De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. File form 1040x online In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. File form 1040x online Also see Employee Discounts , later. File form 1040x online Holiday gifts. File form 1040x online   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. File form 1040x online However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. File form 1040x online Dependent Care Benefits If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. File form 1040x online Dependent care benefits include: Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work, and The fair market value of care in a daycare facility provided or sponsored by your employer. File form 1040x online The amount you can exclude is limited to the lesser of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). File form 1040x online Your employer must show the total amount of dependent care benefits provided to you during the year under a qualified plan in box 10 of your Form W-2. File form 1040x online Your employer also will include any dependent care benefits over $5,000 in your wages shown in box 1 of your Form W-2. File form 1040x online To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. File form 1040x online See the Instructions for Form 2441 for more information. File form 1040x online Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. File form 1040x online For more information, see Publication 970. File form 1040x online Employee Discounts If your employer sells you property or services at a discount, you may be able to exclude the amount of the discount from your income. File form 1040x online The exclusion applies to discounts on property or services offered to customers in the ordinary course of the line of business in which you work. File form 1040x online However, it does not apply to discounts on real property or property commonly held for investment (such as stocks or bonds). File form 1040x online The exclusion is limited to the price charged nonemployee customers multiplied by the following percentage. File form 1040x online For a discount on property, your employer's gross profit percentage (gross profit divided by gross sales) on all property sold during the employer's previous tax year. File form 1040x online (Ask your employer for this percentage. File form 1040x online ) For a discount on services, 20%. File form 1040x online Financial Counseling Fees Financial counseling fees paid for you by your employer are included in your income and must be reported as part of wages. File form 1040x online If the fees are for tax or investment counseling, they can be deducted on Schedule A (Form 1040) as a miscellaneous deduction (subject to the 2%-of-AGI limit). File form 1040x online Qualified retirement planning services paid for you by your employer may be excluded from your income. File form 1040x online For more information, see Retirement Planning Services , later. File form 1040x online Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. File form 1040x online However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. File form 1040x online For exceptions to this rule, see Entire cost excluded , and Entire cost taxed , later. File form 1040x online If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. File form 1040x online Also, it is shown separately in box 12 with code C. File form 1040x online Group-term life insurance. File form 1040x online   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. File form 1040x online Permanent benefits. File form 1040x online   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. File form 1040x online Your employer should be able to tell you the amount to include in your income. File form 1040x online Accidental death benefits. File form 1040x online   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. File form 1040x online Former employer. File form 1040x online   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. File form 1040x online Also, it is shown separately in box 12 with code C. File form 1040x online Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. File form 1040x online You must pay these taxes with your income tax return. File form 1040x online Include them on line 60, Form 1040, and follow the instructions forline 60. File form 1040x online For more information, see the Instructions for Form 1040. File form 1040x online Two or more employers. File form 1040x online   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. File form 1040x online If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. File form 1040x online You must figure how much to include in your income. File form 1040x online Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. File form 1040x online Figuring the taxable cost. File form 1040x online    Use the following worksheet to figure the amount to include in your income. File form 1040x online   If you pay any part of the cost of the insurance, your entire payment reduces, dollar for dollar, the amount you otherwise would include in your income. File form 1040x online However, you cannot reduce the amount to include in your income by: Payments for coverage in a different tax year, Payments for coverage through a cafeteria plan, unless the payments are after-tax contributions, or Payments for coverage not taxed to you because of the exceptions discussed later under Entire cost excluded . File form 1040x online Worksheet 1. File form 1040x online Figuring the Cost of Group-Term Life Insurance To Include in Income 1. File form 1040x online Enter the total amount of your insurance coverage from your employer(s) 1. File form 1040x online   2. File form 1040x online Limit on exclusion for employer-provided group-term life insurance coverage 2. File form 1040x online 50,000 3. File form 1040x online Subtract line 2 from line 1 3. File form 1040x online   4. File form 1040x online Divide line 3 by $1,000. File form 1040x online Figure to the nearest tenth 4. File form 1040x online   5. File form 1040x online Go to Table 1. File form 1040x online Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. File form 1040x online   6. File form 1040x online Multiply line 4 by line 5 6. File form 1040x online     7. File form 1040x online Enter the number of full months of coverage at this cost 7. File form 1040x online   8. File form 1040x online Multiply line 6 by line 7 8. File form 1040x online   9. File form 1040x online Enter the premiums you paid per month 9. File form 1040x online       10. File form 1040x online Enter the number of months you paid the  premiums 10. File form 1040x online       11. File form 1040x online Multiply line 9 by line 10. File form 1040x online 11. File form 1040x online   12. File form 1040x online Subtract line 11 from line 8. File form 1040x online Include this amount in your income as wages 12. File form 1040x online   Table 1. File form 1040x online Cost of $1,000 of Group-Term Life Insurance for One Month   Age Cost     Under 25 $ . File form 1040x online 05     25 through 29 . File form 1040x online 06     30 through 34 . File form 1040x online 08     35 through 39 . File form 1040x online 09     40 through 44 . File form 1040x online 10     45 through 49 . File form 1040x online 15     50 through 54 . File form 1040x online 23     55 through 59 . File form 1040x online 43     60 through 64 . File form 1040x online 66     65 through 69 1. File form 1040x online 27     70 and older 2. File form 1040x online 06   Example. File form 1040x online You are 51 years old and work for employers A and B. File form 1040x online Both employers provide group-term life insurance coverage for you for the entire year. File form 1040x online Your coverage is $35,000 with employer A and $45,000 with employer B. File form 1040x online You pay premiums of $4. File form 1040x online 15 a month under the employer B group plan. File form 1040x online You figure the amount to include in your income as follows. File form 1040x online   Worksheet 1. File form 1040x online Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated 1. File form 1040x online Enter the total amount of your insurance coverage from your employer(s) 1. File form 1040x online 80,000 2. File form 1040x online Limit on exclusion for employer-provided group-term life insurance coverage 2. File form 1040x online 50,000 3. File form 1040x online Subtract line 2 from line 1 3. File form 1040x online 30,000 4. File form 1040x online Divide line 3 by $1,000. File form 1040x online Figure to the nearest tenth 4. File form 1040x online 30. File form 1040x online 0 5. File form 1040x online Go to Table 1. File form 1040x online Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. File form 1040x online . File form 1040x online 23 6. File form 1040x online Multiply line 4 by line 5 6. File form 1040x online 6. File form 1040x online 90 7. File form 1040x online Enter the number of full months of coverage at this cost. File form 1040x online 7. File form 1040x online 12 8. File form 1040x online Multiply line 6 by line 7 8. File form 1040x online 82. File form 1040x online 80 9. File form 1040x online Enter the premiums you paid per month 9. File form 1040x online 4. File form 1040x online 15     10. File form 1040x online Enter the number of months you paid the premiums 10. File form 1040x online 12     11. File form 1040x online Multiply line 9 by line 10. File form 1040x online 11. File form 1040x online 49. File form 1040x online 80 12. File form 1040x online Subtract line 11 from line 8. File form 1040x online Include this amount in your income as wages 12. File form 1040x online 33. File form 1040x online 00 The total amount to include in income for the cost of excess group-term life insurance is $33. File form 1040x online Neither employer provided over $50,000 insurance coverage, so the wages shown on your Forms W-2 do not include any part of that $33. File form 1040x online You must add it to the wages shown on your Forms W-2 and include the total on your return. File form 1040x online Entire cost excluded. File form 1040x online   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. File form 1040x online You are permanently and totally disabled and have ended your employment. File form 1040x online Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. File form 1040x online A charitable organization to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. File form 1040x online (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. File form 1040x online ) The plan existed on January 1, 1984, and: You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. File form 1040x online Entire cost taxed. File form 1040x online   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply. File form 1040x online The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. File form 1040x online You are a key employee and your employer's plan discriminates in favor of key employees. File form 1040x online Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. File form 1040x online The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. File form 1040x online The lodging is: Furnished on the business premises of your employer, Furnished for the convenience of your employer, and A condition of your employment. File form 1040x online (You must accept it in order to be able to properly perform your duties. File form 1040x online ) You also do not include in your income the value of meals or meal money that qualifies as a de minimis fringe benefit. File form 1040x online See De Minimis (Minimal) Benefits , earlier. File form 1040x online Faculty lodging. File form 1040x online   If you are an employee of an educational institution or an academic health center and you are provided with lodging that does not meet the three conditions given earlier, you still may not have to include the value of the lodging in income. File form 1040x online However, the lodging must be qualified campus lodging, and you must pay an adequate rent. File form 1040x online Academic health center. File form 1040x online   This is an organization that meets the following conditions. File form 1040x online Its principal purpose or function is to provide medical or hospital care or medical education or research. File form 1040x online It receives payments for graduate medical education under the Social Security Act. File form 1040x online One of its principal purposes or functions is to provide and teach basic and clinical medical science and research using its own faculty. File form 1040x online Qualified campus lodging. File form 1040x online   Qualified campus lodging is lodging furnished to you, your spouse, or one of your dependents by, or on behalf of, the institution or center for use as a home. File form 1040x online The lodging must be located on or near a campus of the educational institution or academic health center. File form 1040x online Adequate rent. File form 1040x online   The amount of rent you pay for the year for qualified campus lodging is considered adequate if it is at least equal to the lesser of: 5% of the appraised value of the lodging, or The average of rentals paid by individuals (other than employees or students) for comparable lodging held for rent by the educational institution. File form 1040x online If the amount you pay is less than the lesser of these amounts, you must include the difference in your income. File form 1040x online   The lodging must be appraised by an independent appraiser and the appraisal must be reviewed on an annual basis. File form 1040x online Example. File form 1040x online Carl Johnson, a sociology professor for State University, rents a home from the university that is qualified campus lodging. File form 1040x online The house is appraised at $200,000. File form 1040x online The average rent paid for comparable university lodging by persons other than employees or students is $14,000 a year. File form 1040x online Carl pays an annual rent of $11,000. File form 1040x online Carl does not include in his income any rental value because the rent he pays equals at least 5% of the appraised value of the house (5% × $200,000 = $10,000). File form 1040x online If Carl paid annual rent of only $8,000, he would have to include $2,000 in his income ($10,000 − $8,000). File form 1040x online Moving Expense Reimbursements In most cases, if your employer pays for your moving expenses (either directly or indirectly) and the expenses would have been deductible if you paid them yourself, the value is not included in your income. File form 1040x online See Publication 521 for more information. File form 1040x online No-Additional-Cost Services The value of services you receive from your employer for free, at cost, or for a reduced price is not included in your income if your employer: Offers the same service for sale to customers in the ordinary course of the line of business in which you work, and Does not have a substantial additional cost (including any sales income given up) to provide you with the service (regardless of what you paid for the service). File form 1040x online In most cases, no-additional-cost services are excess capacity services, such as airline, bus, or train tickets, hotel rooms, and telephone services. File form 1040x online Example. File form 1040x online You are employed as a flight attendant for a company that owns both an airline and a hotel chain. File form 1040x online Your employer allows you to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to you. File form 1040x online The value of the personal flight is not included in your income. File form 1040x online However, the value of the hotel room is included in your income because you do not work in the hotel business. File form 1040x online Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. File form 1040x online Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. File form 1040x online You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. File form 1040x online Also, see Financial Counseling Fees , earlier. File form 1040x online Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. File form 1040x online A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. File form 1040x online Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. File form 1040x online However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. File form 1040x online Exclusion limit. File form 1040x online   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. File form 1040x online   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. File form 1040x online   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. File form 1040x online   If the benefits have a value that is more than these limits, the excess must be included in your income. File form 1040x online You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. File form 1040x online Commuter highway vehicle. File form 1040x online   This is a highway vehicle that seats at least six adults (not including the driver). File form 1040x online At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). File form 1040x online Transit pass. File form 1040x online   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. File form 1040x online Qualified parking. File form 1040x online   This is parking provided to an employee at or near the employer's place of business. File form 1040x online It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. File form 1040x online It does not include parking at or near the employee's home. File form 1040x online Qualified bicycle commuting. File form 1040x online   This is reimbursement based on the number of qualified bicycle commuting months for the year. File form 1040x online A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. File form 1040x online The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. File form 1040x online Tuition Reduction You can exclude a qualified tuition reduction from your income. File form 1040x online This is the amount of a reduction in tuition: For education (below graduate level) furnished by an educational institution to an employee, former employee who retired or became disabled, or his or her spouse and dependent children. File form 1040x online For education furnished to a graduate student at an educational institution if the graduate student is engaged in teaching or research activities for that institution. File form 1040x online Representing payment for teaching, research, or other services if you receive the amount under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance program. File form 1040x online For more information, see Publication 970. File form 1040x online Working Condition Benefits If your employer provides you with a product or service and the cost of it would have been allowable as a business or depreciation deduction if you paid for it yourself, the cost is not included in your income. File form 1040x online Example. File form 1040x online You work as an engineer and your employer provides you with a subscription to an engineering trade magazine. File form 1040x online The cost of the subscription is not included in your income because the cost would have been allowable to you as a business deduction if you had paid for the subscription yourself. File form 1040x online Valuation of Fringe Benefits If a fringe benefit is included in your income, the amount included is generally its value determined under the general valuation rule or under the special valuation rules. File form 1040x online For an exception, see Group-Term Life Insurance , earlier. File form 1040x online General valuation rule. File form 1040x online   You must include in your income the amount by which the fair market value of the fringe benefit is more than the sum of: The amount, if any, you paid for the benefit, plus The amount, if any, specifically excluded from your income by law. File form 1040x online If you pay fair market value for a fringe benefit, no amount is included in your income. File form 1040x online Fair market value. File form 1040x online   The fair market value of a fringe benefit is determined by all the facts and circumstances. File form 1040x online It is the amount you would have to pay a third party to buy or lease the benefit. File form 1040x online This is determined without regard to: Your perceived value of the benefit, or The amount your employer paid for the benefit. File form 1040x online Employer-provided vehicles. File form 1040x online   If your employer provides a car (or other highway motor vehicle) to you, your personal use of the car is usually a taxable noncash fringe benefit. File form 1040x online   Under the general valuation rules, the value of an employer-provided vehicle is the amount you would have to pay a third party to lease the same or a similar vehicle on the same or comparable terms in the same geographic area where you use the vehicle. File form 1040x online An example of a comparable lease term is the amount of time the vehicle is available for your use, such as a 1-year period. File form 1040x online The value cannot be determined by multiplying a cents-per-mile rate times the number of miles driven unless you prove the vehicle could have been leased on a cents-per-mile basis. File form 1040x online Flights on employer-provided aircraft. File form 1040x online   Under the general valuation rules, if your flight on an employer-provided piloted aircraft is primarily personal and you control the use of the aircraft for the flight, the value is the amount it would cost to charter the flight from a third party. File form 1040x online   If there is more than one employee on the flight, the cost to charter the aircraft must be divided among those employees. File form 1040x online The division must be based on all the facts, including which employee or employees control the use of the aircraft. File form 1040x online Special valuation rules. File form 1040x online   You generally can use a special valuation rule for a fringe benefit only if your employer uses the rule. File form 1040x online If your employer uses a special valuation rule, you cannot use a different special rule to value that benefit. File form 1040x online You always can use the general valuation rule discussed earlier, based on facts and circumstances, even if your employer uses a special rule. File form 1040x online   If you and your employer use a special valuation rule, you must include in your income the amount your employer determines under the special rule minus the sum of: Any amount you repaid your employer, plus Any amount specifically excluded from income by law. File form 1040x online The special valuation rules are the following. File form 1040x online The automobile lease rule. File form 1040x online The vehicle cents-per-mile rule. File form 1040x online The commuting rule. File form 1040x online The unsafe conditions commuting rule. File form 1040x online The employer-operated eating-facility rule. File form 1040x online   For more information on these rules, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. File form 1040x online    For information on the non-commercial flight and commercial flight valuation rules, see sections 1. File form 1040x online 61-21(g) and 1. File form 1040x online 61-21(h) of the regulations. File form 1040x online Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. File form 1040x online (Your employer can tell you whether your retirement plan is qualified. File form 1040x online ) However, the cost of life insurance coverage included in the plan may have to be included. File form 1040x online See Group-Term Life Insurance , earlier, under Fringe Benefits. File form 1040x online If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. File form 1040x online However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. File form 1040x online For information on distributions from retirement plans, see Publication 575 (or Publication 721, Tax Guide to U. File form 1040x online S. File form 1040x online Civil Service Retirement Benefits, if you are a federal employee or retiree). File form 1040x online Elective Deferrals If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. File form 1040x online The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. File form 1040x online An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. File form 1040x online However, it is included in wages subject to social security and Medicare taxes. File form 1040x online Elective deferrals include elective contributions to the following retirement plans. File form 1040x online Cash or deferred arrangements (section 401(k) plans). File form 1040x online The Thrift Savings Plan for federal employees. File form 1040x online Salary reduction simplified employee pension plans (SARSEP). File form 1040x online Savings incentive match plans for employees (SIMPLE plans). File form 1040x online Tax-sheltered annuity plans (403(b) plans). File form 1040x online Section 501(c)(18)(D) plans. File form 1040x online (But see Reporting by employer , later. File form 1040x online ) Section 457 plans. File form 1040x online Qualified automatic contribution arrangements. File form 1040x online   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. File form 1040x online You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. File form 1040x online The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. File form 1040x online   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. File form 1040x online Overall limit on deferrals. File form 1040x online   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3), earlier. File form 1040x online The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. File form 1040x online Amounts deferred under specific plan limits are part of the overall limit on deferrals. File form 1040x online   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. File form 1040x online However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. File form 1040x online Catch-up contributions. File form 1040x online   You may be allowed catch-up contributions (additional elective deferrals) if you are age 50 or older by the end of your tax year. File form 1040x online For more information about catch-up contributions to 403(b) plans, see chapter 6 of Publication 571, Tax Sheltered Annuity Plans. File form 1040x online   For more information about additional elective deferrals to: SEPs (SARSEPs), see Salary Reduction Simplified Employee Pension in chapter 2 of Publication 560, Retirement Plans for Small Business. File form 1040x online SIMPLE plans, see How Much Can Be Contributed on Your Behalf? in chapter 3 of Publication 590. File form 1040x online Section 457 plans, see Limit for deferrals under section 457 plans , later. File form 1040x online Limit for deferrals under SIMPLE plans. File form 1040x online   If you are a participant in a SIMPLE plan, you generally should not have deferred more than $12,000 in 2013. File form 1040x online Amounts you defer under a SIMPLE plan count toward the overall limit ($17,500 for 2013) and may affect the amount you can defer under other elective deferral plans. File form 1040x online Limit for tax-sheltered annuities. File form 1040x online   If you are a participant in a tax-sheltered annuity plan (403(b) plan), the limit on elective deferrals for 2013 generally is $17,500. File form 1040x online However, if you have at least 15 years of service with a public school system, a hospital, a home health service agency, a health and welfare service agency, a church, or a convention or association of churches (or associated organization), the limit on elective deferrals is increased by the least of the following amounts. File form 1040x online $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in earlier years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior tax years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. File form 1040x online   If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013. File form 1040x online   For more information, see Publication 571. File form 1040x online Limit for deferral under section 501(c)(18) plans. File form 1040x online   If you are a participant in a section 501(c)(18) plan (a trust created before June 25, 1959, funded only by employee contributions), you should have deferred no more than the lesser of $7,000 or 25% of your compensation. File form 1040x online Amounts you defer under a section 501(c)(18) plan count toward the overall limit ($17,500 in 2013) and may affect the amount you can defer under other elective deferral plans. File form 1040x online Limit for deferrals under section 457 plans. File form 1040x online   If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organizations), you should have deferred no more than the lesser of your includible compensation or $17,500 in 2013. File form 1040x online However, if you are within 3 years of normal retirement age, you may be allowed an increased limit if the plan allows it. File form 1040x online See Increased limit , later. File form 1040x online Includible compensation. File form 1040x online   This is the pay you received for the year from the employer who maintained the section 457 plan. File form 1040x online In most cases, it includes all the following payments. File form 1040x online Wages and salaries. File form 1040x online Fees for professional services. File form 1040x online The value of any employer-provided qualified transportation fringe benefit (defined under Transportation , earlier) that is not included in your income. File form 1040x online Other amounts received (cash or noncash) for personal services you performed, including, but not limited to, the following items. File form 1040x online Commissions and tips. File form 1040x online Fringe benefits. File form 1040x online Bonuses. File form 1040x online Employer contributions (elective deferrals) to: The section 457 plan. File form 1040x online Qualified cash or deferred arrangements (section 401(k) plans) that are not included in your income. File form 1040x online A salary reduction simplified employee pension (SARSEP). File form 1040x online A tax-sheltered annuity (section 403(b) plan). File form 1040x online A savings incentive match plan for employees (SIMPLE plan). File form 1040x online A section 125 cafeteria plan. File form 1040x online   Instead of using the amounts listed earlier to determine your includible compensation, your employer can use any of the following amounts. File form 1040x online Your wages as defined for income tax withholding purposes. File form 1040x online Your wages as reported in box 1 of Form W-2. File form 1040x online Your wages that are subject to social security withholding (including elective deferrals). File form 1040x online Increased limit. File form 1040x online   During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your plan may provide that your limit is the lesser of: Twice the annual limit ($35,000 for 2013), or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions). File form 1040x online Catch-up contributions. File form 1040x online   You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. File form 1040x online If you qualify, your limit can be the lesser of your includible compensation or $17,500, plus $5,500. File form 1040x online However, if you are within 3 years of retirement age and your plan provides the increased limit, discussed earlier, that limit may be higher. File form 1040x online Designated Roth contributions. File form 1040x online   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. File form 1040x online Designated Roth contributions are treated as elective deferrals, except that they are included in income. File form 1040x online Your retirement plan must maintain separate accounts and recordkeeping for the designated Roth contributions. File form 1040x online   Qualified distributions from a Roth plan are not included in income. File form 1040x online In most cases, a distribution made before the end of the 5-tax-year period beginning with the first tax year for which you made a designated Roth contribution to the plan is not a qualified distribution. File form 1040x online Reporting by employer. File form 1040x online   Your employer generally should not include elective deferrals in your wages in box 1 of Form W-2. File form 1040x online Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount deferred in box 12. File form 1040x online Section 501(c)(18)(D) contributions. File form 1040x online   Wages shown in box 1 of your Form W-2 should not have been reduced for contributions you made to a section 501(c)(18)(D) retirement plan. File form 1040x online The amount you contributed should be identified with code “H” in box 12. File form 1040x online You may deduct the amount deferred subject to the limits that apply. File form 1040x online Include your deduction in the total on Form 1040, line 36. File form 1040x online Enter the amount and “501(c)(18)(D)” on the dotted line next to line 36. File form 1040x online Designated Roth contributions. File form 1040x online    These contributions are elective deferrals but are included in your wages in box 1 of Form W-2. File form 1040x online Designated Roth contributions to a section 401(k) plan are reported using code AA in box 12, or, for section 403(b) plans, code BB in box 12. File form 1040x online Excess deferrals. File form 1040x online   If your deferrals exceed the limit, you must notify your plan by the date required by the plan. File form 1040x online If the plan permits, the excess amount will be distributed to you. File form 1040x online If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. File form 1040x online You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. File form 1040x online The plan then must pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. File form 1040x online   You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. File form 1040x online File Form 1040 to add the excess deferral amount to your wages on line 7. File form 1040x online Do not use Form 1040A or Form 1040EZ to report excess deferral amounts. File form 1040x online Excess not distributed. File form 1040x online   If you do not take out the excess amount, you cannot include it in the cost of the contract even though you included it in your income. File form 1040x online Therefore, you are taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution. File form 1040x online Excess distributed to you. File form 1040x online   If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. File form 1040x online If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. File form 1040x online Any income on the excess deferral taken out is taxable in the tax year in which you take it out. File form 1040x online If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income. File form 1040x online    You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. File form 1040x online Use the following rules to report a corrective distribution shown on Form 1099-R for 2013. File form 1040x online If the distribution was for a 2013 excess deferral, your Form 1099-R should have the code “8” in box 7. File form 1040x online Add the excess deferral amount to your wages on your 2013 tax return. File form 1040x online If the distribution was for a 2013 excess deferral to a designated Roth account, your Form 1099-R should have code “B” in box 7. File form 1040x online Do not add this amount to your wages on your 2013 return. File form 1040x online If the distribution was for a 2012 excess deferral, your Form 1099-R should have the code “P” in box 7. File form 1040x online If you did not add the excess deferral amount to your wages on your 2012 tax return, you must file an amended return on Form 1040X, Amended U. File form 1040x online S. File form 1040x online Individual Income Tax Return. File form 1040x online If you did not receive the distribution by April 15, 2013, you also must add it to your wages on your 2013 tax return. File form 1040x online If the distribution was for the income earned on an excess deferral, your Form 1099-R should have the code “8” in box 7. File form 1040x online Add the income amount to your wages on your 2013 income tax return, regardless of when the excess deferral was made. File form 1040x online Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. File form 1040x online Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution. File form 1040x online ”    Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. File form 1040x online It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. File form 1040x online Excess Contributions If you are a highly compensated employee, the total of your elective deferrals and other contributions made for you for any year under a section 401(k) plan or SARSEP can be, as a percentage of pay, no more than 125% of the average deferral percentage (ADP) of all eligible non-highly compensated employees. File form 1040x online If the total contributed to the plan is more than the amount allowed under the ADP test, the excess contributions must be either distributed to you or recharacterized as after-tax employee contributions by treating them as distributed to you and then contributed by you to the plan. File form 1040x online You must include the excess contributions in your income as wages on Form 1040, line 7. File form 1040x online You cannot use Form 1040A or Form 1040EZ to report excess contribution amounts. File form 1040x online If you receive a corrective distribution of excess contributions (and allocable income), it is included in your income in the year of the distribution. File form 1040x online The allocable income is the amount of gain or loss through the end of the plan year for which the contribution was made that is allocable to the excess contributions. File form 1040x online You should receive a Form 1099-R for the year the excess contributions are distributed to you. File form 1040x online Add the distribution to your wages for that year. File form 1040x online Even though a corrective distribution of excess contributions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. File form 1040x online It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. File form 1040x online Excess Annual Additions The amount contributed in 2013 to a defined contribution plan is generally limited to the lesser of 100% of your compensation or $51,000. File form 1040x online Under certain circumstances, contributions that exceed these limits (excess annual additions) may be corrected by a distribution of your elective deferrals or a return of your after-tax contributions and earnings from these contributions. File form 1040x online A corrective payment of excess annual additions consisting of elective deferrals or earnings from your after-tax contributions is fully taxable in the year paid. File form 1040x online A corrective payment consisting of your after-tax contributions is not taxable. File form 1040x online If you received a corrective payment of excess annual additions, you should receive a separate Form 1099-R for the year of the payment with the code “E” in box 7. File form 1040x online Report the total payment shown in box 1 of Form 1099-R on line 16a of Form 1040 or line 12a of Form 1040A. File form 1040x online Report the taxable amount shown in box 2a of Form 1099-R on line 16b of Form 1040 or line 12b of Form 1040A. File form 1040x online Even though a corrective distribution of excess annual additions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. File form 1040x online It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. File form 1040x online Stock Options If you receive an option to buy or sell stock or other property as payment for your services, you may have income when you receive the option (the grant), when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option or property acquired through exercise of the option. File form 1040x online The timing, type, and amount of income inclusion depend on whether you receive a nonstatutory stock option or a statutory stock option. File form 1040x online Your employer can tell you which kind of option you hold. File form 1040x online Nonstatutory Stock Options Grant of option. File form 1040x online   If you are granted a nonstatutory stock option, you may have income when you receive the option. File form 1040x online The amount of income to include and the time to include it depend on whether the fair market value of the option can be readily determined. File form 1040x online The fair market value of an option can be readily determined if it is actively traded on an established market. File form 1040x online    The fair market value of an option that is not traded on an established market can be readily determined only if all of the following conditions exist. File form 1040x online You can transfer the option. File form 1040x online You can exercise the option immediately in full. File form 1040x online The option or the property subject to the option is not subject to any condition or restriction (other than a condition to secure payment of the purchase price) that has a significant effect on the fair market value of the option. File form 1040x online The fair market value of the option privilege can be readily determined. File form 1040x online The option privilege for an option to buy is the opportunity to benefit during the option's exercise period from any increase in the value of property subject to the option without risking any capital. File form 1040x online For example, if during the exercise period the fair market value of stock subject to an option is greater than the option's exercise price, a profit may be realized by exercising the option and immediately selling the stock at its higher value. File form 1040x online The option privilege for an option to sell is the opportunity to benefit during the exercise period from a decrease in the value of the property subject to the option. File form 1040x online If you or a member of your family is an officer, director, or more-than-10% owner of an expatriated corporation, you may owe an excise tax on the value of nonstatutory options and other stock-based compensation from that corporation. File form 1040x online For more information on the excise tax, see Internal Revenue Code section 4985. File form 1040x online Option with readily determinable value. File form 1040x online   If you receive a nonstatutory stock option that has a readily determinable fair market value at the time it is granted to you, the option is treated like other property received as compensation. File form 1040x online See Restricted Property , later, for rules on how much income to include and when to include it. File form 1040x online However, the rule described in that discussion for choosing to include the value of property in your income for the year of the transfer does not apply to a nonstatutory option. File form 1040x online Option without readily determinable value. File form 1040x online   If the fair market value of the option is not readily determinable at the time it is granted to you (even if it is determined later), you do not have income until you exercise or transfer the option. File form 1040x online    Exercise or transfer of option. File form 1040x online   When you exercise a nonstatutory stock option, the amount to include in your income depends on whether the option had a readily determinable value. File form 1040x online Option with readily determinable value. File form 1040x online   When you exercise a nonstatutory stock option that had a readily determinable value at the time the option was granted, you do not have to include any amount in income. File form 1040x online Option without readily determinable value. File form 1040x online   When you exercise a nonstatutory stock option that did not have a readily determinable value at the time the option was granted, the restricted prope