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Filing A 2012 Tax Return

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Filing A 2012 Tax Return

Filing a 2012 tax return 5. Filing a 2012 tax return   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Filing a 2012 tax return Free help with your tax return. Filing a 2012 tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. Filing a 2012 tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Filing a 2012 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Filing a 2012 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Filing a 2012 tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Filing a 2012 tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Filing a 2012 tax return gov, download the IRS2Go app, or call 1-800-906-9887. Filing a 2012 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. Filing a 2012 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. Filing a 2012 tax return aarp. Filing a 2012 tax return org/money/taxaide or call 1-888-227-7669. Filing a 2012 tax return For more information on these programs, go to IRS. Filing a 2012 tax return gov and enter “VITA” in the search box. Filing a 2012 tax return Internet. Filing a 2012 tax return    IRS. Filing a 2012 tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Filing a 2012 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Filing a 2012 tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Filing a 2012 tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. Filing a 2012 tax return gov or download the IRS2Go app and select the Refund Status option. Filing a 2012 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Filing a 2012 tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Filing a 2012 tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing a 2012 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Filing a 2012 tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. Filing a 2012 tax return No need to wait on the phone or stand in line. Filing a 2012 tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Filing a 2012 tax return When you reach the response screen, you can print the entire interview and the final response for your records. Filing a 2012 tax return New subject areas are added on a regular basis. Filing a 2012 tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Filing a 2012 tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Filing a 2012 tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Filing a 2012 tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Filing a 2012 tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Filing a 2012 tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Filing a 2012 tax return You can also ask the IRS to mail a return or an account transcript to you. Filing a 2012 tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Filing a 2012 tax return gov or by calling 1-800-908-9946. Filing a 2012 tax return Tax return and tax account transcripts are generally available for the current year and the past three years. Filing a 2012 tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Filing a 2012 tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Filing a 2012 tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Filing a 2012 tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. Filing a 2012 tax return gov and enter Where's My Amended Return? in the search box. Filing a 2012 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Filing a 2012 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Filing a 2012 tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. Filing a 2012 tax return gov. Filing a 2012 tax return Select the Payment tab on the front page of IRS. Filing a 2012 tax return gov for more information. Filing a 2012 tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Filing a 2012 tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. Filing a 2012 tax return gov. Filing a 2012 tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Filing a 2012 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Filing a 2012 tax return gov. Filing a 2012 tax return Request an Electronic Filing PIN by going to IRS. Filing a 2012 tax return gov and entering Electronic Filing PIN in the search box. Filing a 2012 tax return Download forms, instructions and publications, including accessible versions for people with disabilities. Filing a 2012 tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Filing a 2012 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Filing a 2012 tax return An employee can answer questions about your tax account or help you set up a payment plan. Filing a 2012 tax return Before you visit, check the Office Locator on IRS. Filing a 2012 tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Filing a 2012 tax return If you have a special need, such as a disability, you can request an appointment. Filing a 2012 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Filing a 2012 tax return Apply for an Employer Identification Number (EIN). Filing a 2012 tax return Go to IRS. Filing a 2012 tax return gov and enter Apply for an EIN in the search box. Filing a 2012 tax return Read the Internal Revenue Code, regulations, or other official guidance. Filing a 2012 tax return Read Internal Revenue Bulletins. Filing a 2012 tax return Sign up to receive local and national tax news and more by email. Filing a 2012 tax return Just click on “subscriptions” above the search box on IRS. Filing a 2012 tax return gov and choose from a variety of options. Filing a 2012 tax return Phone. Filing a 2012 tax return   You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Filing a 2012 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Filing a 2012 tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Filing a 2012 tax return gov, or download the IRS2Go app. Filing a 2012 tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Filing a 2012 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Filing a 2012 tax return Most VITA and TCE sites offer free electronic filing. Filing a 2012 tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Filing a 2012 tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Filing a 2012 tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Filing a 2012 tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Filing a 2012 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Filing a 2012 tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing a 2012 tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Filing a 2012 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Filing a 2012 tax return Note, the above information is for our automated hotline. Filing a 2012 tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Filing a 2012 tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Filing a 2012 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Filing a 2012 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Filing a 2012 tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Filing a 2012 tax return You should receive your order within 10 business days. Filing a 2012 tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Filing a 2012 tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Filing a 2012 tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Filing a 2012 tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Filing a 2012 tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. Filing a 2012 tax return Walk-in. Filing a 2012 tax return   You can find a selection of forms, publications and services — in-person. Filing a 2012 tax return Products. Filing a 2012 tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Filing a 2012 tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Filing a 2012 tax return Services. Filing a 2012 tax return You can walk in to your local TAC for face-to-face tax help. Filing a 2012 tax return An employee can answer questions about your tax account or help you set up a payment plan. Filing a 2012 tax return Before visiting, use the Office Locator tool on IRS. Filing a 2012 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Filing a 2012 tax return Mail. Filing a 2012 tax return   You can send your order for forms, instructions, and publications to the address below. Filing a 2012 tax return You should receive a response within 10 business days after your request is received. Filing a 2012 tax return Internal Revenue Service 1201 N. Filing a 2012 tax return Mitsubishi Motorway Bloomington, IL 61705-6613   The Taxpayer Advocate Service Is Here to Help You. Filing a 2012 tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. Filing a 2012 tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Filing a 2012 tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Filing a 2012 tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Filing a 2012 tax return You face (or your business is facing) an immediate threat of adverse action. Filing a 2012 tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Filing a 2012 tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Filing a 2012 tax return Here's why we can help: TAS is an independent organization within the IRS. Filing a 2012 tax return Our advocates know how to work with the IRS. Filing a 2012 tax return Our services are free and tailored to meet your needs. Filing a 2012 tax return We have offices in every state, the District of Columbia, and Puerto Rico. Filing a 2012 tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Filing a 2012 tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Filing a 2012 tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Filing a 2012 tax return Prev  Up  Next   Home   More Online Publications
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The Filing A 2012 Tax Return

Filing a 2012 tax return 5. Filing a 2012 tax return   Additional Rules for Listed Property Table of Contents Introduction Useful Items - You may want to see: What Is Listed Property?Passenger Automobiles Other Property Used for Transportation Computers and Related Peripheral Equipment Can Employees Claim a Deduction? What Is the Business-Use Requirement?How To Allocate Use Qualified Business Use Recapture of Excess Depreciation Lessee's Inclusion Amount Do the Passenger Automobile Limits Apply?Maximum Depreciation Deduction Deductions After the Recovery Period Deductions For Passenger Automobiles Acquired in a Trade-in What Records Must Be Kept?Adequate Records How Is Listed Property Information Reported? Introduction This chapter discusses the deduction limits and other special rules that apply to certain listed property. Filing a 2012 tax return Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. Filing a 2012 tax return Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. Filing a 2012 tax return Deduction for employees. Filing a 2012 tax return If your use of the property is not for your employer's convenience or is not required as a condition of your employment, you cannot deduct depreciation or rent expenses for your use of the property as an employee. Filing a 2012 tax return Business-use requirement. Filing a 2012 tax return If the property is not used predominantly (more than 50%) for qualified business use, you cannot claim the section 179 deduction or a special depreciation allowance. Filing a 2012 tax return In addition, you must figure any depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS) using the straight line method over the ADS recovery period. Filing a 2012 tax return You may also have to recapture (include in income) any excess depreciation claimed in previous years. Filing a 2012 tax return A similar inclusion amount applies to certain leased property. Filing a 2012 tax return Passenger automobile limits and rules. Filing a 2012 tax return Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. Filing a 2012 tax return You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. Filing a 2012 tax return This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. Filing a 2012 tax return It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. Filing a 2012 tax return Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. Filing a 2012 tax return What Is Listed Property? Listed property is any of the following. Filing a 2012 tax return Passenger automobiles (as defined later). Filing a 2012 tax return Any other property used for transportation, unless it is an excepted vehicle. Filing a 2012 tax return Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). Filing a 2012 tax return Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. Filing a 2012 tax return A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publication 587. Filing a 2012 tax return Improvements to listed property. Filing a 2012 tax return   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. Filing a 2012 tax return The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. Filing a 2012 tax return For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method. Filing a 2012 tax return Passenger Automobiles A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). Filing a 2012 tax return It includes any part, component, or other item physically attached to the automobile at the time of purchase or usually included in the purchase price of an automobile. Filing a 2012 tax return The following vehicles are not considered passenger automobiles for these purposes. Filing a 2012 tax return An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. Filing a 2012 tax return A vehicle used directly in the trade or business of transporting persons or property for pay or hire. Filing a 2012 tax return A truck or van that is a qualified nonpersonal use vehicle. Filing a 2012 tax return Qualified nonpersonal use vehicles. Filing a 2012 tax return   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. Filing a 2012 tax return They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. Filing a 2012 tax return They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. Filing a 2012 tax return For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. Filing a 2012 tax return Other Property Used for Transportation Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property. Filing a 2012 tax return Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. Filing a 2012 tax return Excepted vehicles. Filing a 2012 tax return   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). Filing a 2012 tax return Clearly marked police and fire vehicles. Filing a 2012 tax return Unmarked vehicles used by law enforcement officers if the use is officially authorized. Filing a 2012 tax return Ambulances used as such and hearses used as such. Filing a 2012 tax return Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. Filing a 2012 tax return Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. Filing a 2012 tax return Combines, cranes and derricks, and forklifts. Filing a 2012 tax return Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. Filing a 2012 tax return Qualified moving vans. Filing a 2012 tax return Qualified specialized utility repair trucks. Filing a 2012 tax return School buses used in transporting students and employees of schools. Filing a 2012 tax return Other buses with a capacity of at least 20 passengers that are used as passenger buses. Filing a 2012 tax return Tractors and other special purpose farm vehicles. Filing a 2012 tax return Clearly marked police and fire vehicle. Filing a 2012 tax return   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. Filing a 2012 tax return It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. Filing a 2012 tax return It is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times. Filing a 2012 tax return It is prohibited from being used for personal use (other than commuting) outside the limit of the police officer's arrest powers or the fire fighter's obligation to respond to an emergency. Filing a 2012 tax return It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. Filing a 2012 tax return A marking on a license plate is not a clear marking for these purposes. Filing a 2012 tax return Qualified moving van. Filing a 2012 tax return   A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met. Filing a 2012 tax return No personal use of the van is allowed other than for travel to and from a move site or for minor personal use, such as a stop for lunch on the way from one move site to another. Filing a 2012 tax return Personal use for travel to and from a move site happens no more than five times a month on average. Filing a 2012 tax return Personal use is limited to situations in which it is more convenient to the employer, because of the location of the employee's residence in relation to the location of the move site, for the van not to be returned to the employer's business location. Filing a 2012 tax return Qualified specialized utility repair truck. Filing a 2012 tax return   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. Filing a 2012 tax return The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. Filing a 2012 tax return Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, equipment, or parts and would make it unlikely that the truck would be used, other than minimally, for personal purposes. Filing a 2012 tax return The employer requires the employee to drive the truck home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility services. Filing a 2012 tax return Computers and Related Peripheral Equipment A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. Filing a 2012 tax return It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. Filing a 2012 tax return Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. Filing a 2012 tax return The following are neither computers nor related peripheral equipment. Filing a 2012 tax return Any equipment that is an integral part of other property that is not a computer. Filing a 2012 tax return Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. Filing a 2012 tax return Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. Filing a 2012 tax return Can Employees Claim a Deduction? If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned or rented) in performing services as an employee only if your use is a business use. Filing a 2012 tax return The use of your property in performing services as an employee is a business use only if both the following requirements are met. Filing a 2012 tax return The use is for your employer's convenience. Filing a 2012 tax return The use is required as a condition of your employment. Filing a 2012 tax return If these requirements are not met, you cannot deduct depreciation (including the section 179 deduction) or rent expenses for your use of the property as an employee. Filing a 2012 tax return Employer's convenience. Filing a 2012 tax return   Whether the use of listed property is for your employer's convenience must be determined from all the facts. Filing a 2012 tax return The use is for your employer's convenience if it is for a substantial business reason of the employer. Filing a 2012 tax return The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. Filing a 2012 tax return Condition of employment. Filing a 2012 tax return   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. Filing a 2012 tax return The use of property must be required for you to perform your duties properly. Filing a 2012 tax return Your employer does not have to require explicitly that you use the property. Filing a 2012 tax return However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. Filing a 2012 tax return Example 1. Filing a 2012 tax return Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. Filing a 2012 tax return She owns and uses a motorcycle to deliver packages to downtown offices. Filing a 2012 tax return We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. Filing a 2012 tax return Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. Filing a 2012 tax return Example 2. Filing a 2012 tax return Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. Filing a 2012 tax return He must travel to these sites on a regular basis. Filing a 2012 tax return Uplift does not furnish an automobile or explicitly require him to use his own automobile. Filing a 2012 tax return However, it pays him for any costs he incurs in traveling to the various sites. Filing a 2012 tax return The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. Filing a 2012 tax return Example 3. Filing a 2012 tax return Assume the same facts as in Example 2 except that Uplift furnishes a car to Bill, who chooses to use his own car and receive payment for using it. Filing a 2012 tax return The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. Filing a 2012 tax return Example 4. Filing a 2012 tax return Marilyn Lee is a pilot for Y Company, a small charter airline. Filing a 2012 tax return Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. Filing a 2012 tax return Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. Filing a 2012 tax return Marilyn owns her own airplane. Filing a 2012 tax return The use of her airplane to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment. Filing a 2012 tax return Example 5. Filing a 2012 tax return David Rule is employed as an engineer with Zip, an engineering contracting firm. Filing a 2012 tax return He occasionally takes work home at night rather than work late in the office. Filing a 2012 tax return He owns and uses a home computer which is virtually identical to the office model. Filing a 2012 tax return His use of the computer is neither for the convenience of his employer nor required as a condition of employment. Filing a 2012 tax return What Is the Business-Use Requirement? You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if the property meets the business-use requirement. Filing a 2012 tax return To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. Filing a 2012 tax return If this requirement is not met, the following rules apply. Filing a 2012 tax return Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. Filing a 2012 tax return Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. Filing a 2012 tax return Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. Filing a 2012 tax return This rule applies each year of the recovery period. Filing a 2012 tax return Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use. Filing a 2012 tax return A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use. Filing a 2012 tax return Being required to use the straight line method for an item of listed property not used predominantly for qualified business use is not the same as electing the straight line method. Filing a 2012 tax return It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. Filing a 2012 tax return Exception for leased property. Filing a 2012 tax return   The business-use requirement generally does not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. Filing a 2012 tax return   You are considered regularly engaged in the business of leasing listed property only if you enter into contracts for the leasing of listed property with some frequency over a continuous period of time. Filing a 2012 tax return This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of your business in its entirety. Filing a 2012 tax return Occasional or incidental leasing activity is insufficient. Filing a 2012 tax return For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. Filing a 2012 tax return An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. Filing a 2012 tax return How To Allocate Use To determine whether the business-use requirement is met, you must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. Filing a 2012 tax return For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. Filing a 2012 tax return You determine the percentage of qualified business use by dividing the number of miles you drove the vehicle for business purposes during the year by the total number of miles you drove the vehicle for all purposes (including business miles) during the year. Filing a 2012 tax return For other listed property, allocate the property's use on the basis of the most appropriate unit of time the property is actually used (rather than merely being available for use). Filing a 2012 tax return For example, you can determine the percentage of business use of a computer by dividing the number of hours you used the computer for business purposes during the year by the total number of hours you used the computer for all purposes (including business use) during the year. Filing a 2012 tax return Entertainment use. Filing a 2012 tax return   Treat the use of listed property for entertainment, recreation, or amusement purposes as a business use only to the extent you can deduct expenses (other than interest and property tax expenses) due to its use as an ordinary and necessary business expense. Filing a 2012 tax return Commuting use. Filing a 2012 tax return   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. Filing a 2012 tax return For example, a business telephone call made on a car telephone while commuting to work does not change the character of the trip from commuting to business. Filing a 2012 tax return This is also true for a business meeting held in a car while commuting to work. Filing a 2012 tax return Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. Filing a 2012 tax return The fact that an automobile is used to display material that advertises the owner's or user's trade or business does not convert an otherwise personal use into business use. Filing a 2012 tax return Use of your automobile by another person. Filing a 2012 tax return   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. Filing a 2012 tax return That use is directly connected with your business. Filing a 2012 tax return You properly report the value of the use as income to the other person and withhold tax on the income where required. Filing a 2012 tax return You are paid a fair market rent. Filing a 2012 tax return Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). Filing a 2012 tax return Employee deductions. Filing a 2012 tax return   If you are an employee, do not treat your use of listed property as business use unless it is for your employer's convenience and is required as a condition of your employment. Filing a 2012 tax return See Can Employees Claim a Deduction , earlier. Filing a 2012 tax return Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. Filing a 2012 tax return However, it does not include the following uses. Filing a 2012 tax return The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property). Filing a 2012 tax return The use of property as pay for the services of a 5% owner or related person. Filing a 2012 tax return The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required. Filing a 2012 tax return Property does not stop being used predominantly for qualified business use because of a transfer at death. Filing a 2012 tax return Exception for leasing or compensatory use of aircraft. Filing a 2012 tax return   Treat the leasing of any aircraft by a 5% owner or related person, or the compensatory use of any aircraft, as a qualified business use if at least 25% of the total use of the aircraft during the year is for a qualified business use. Filing a 2012 tax return 5% owner. Filing a 2012 tax return   For a business entity that is not a corporation, a 5% owner is any person who owns more than 5% of the capital or profits interest in the business. Filing a 2012 tax return   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. Filing a 2012 tax return More than 5% of the outstanding stock of the corporation. Filing a 2012 tax return Stock possessing more than 5% of the total combined voting power of all stock in the corporation. Filing a 2012 tax return Related persons. Filing a 2012 tax return   For a description of related persons, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 . Filing a 2012 tax return For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. Filing a 2012 tax return Examples. Filing a 2012 tax return   The following examples illustrate whether the use of business property is qualified business use. Filing a 2012 tax return Example 1. Filing a 2012 tax return John Maple is the sole proprietor of a plumbing contracting business. Filing a 2012 tax return John employs his brother, Richard, in the business. Filing a 2012 tax return As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. Filing a 2012 tax return The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. Filing a 2012 tax return The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. Filing a 2012 tax return Example 2. Filing a 2012 tax return John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. Filing a 2012 tax return He does not include the value of the personal use of the company automobiles as part of their compensation and he does not withhold tax on the value of the use of the automobiles. Filing a 2012 tax return This use of company automobiles by employees is not a qualified business use. Filing a 2012 tax return Example 3. Filing a 2012 tax return James Company Inc. Filing a 2012 tax return owns several automobiles that its employees use for business purposes. Filing a 2012 tax return The employees also are allowed to take the automobiles home at night. Filing a 2012 tax return The fair market value of each employee's use of an automobile for any personal purpose, such as commuting to and from work, is reported as income to the employee and James Company withholds tax on it. Filing a 2012 tax return This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. Filing a 2012 tax return Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. Filing a 2012 tax return However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. Filing a 2012 tax return Example 1. Filing a 2012 tax return Sarah Bradley uses a home computer 50% of the time to manage her investments. Filing a 2012 tax return She also uses the computer 40% of the time in her part-time consumer research business. Filing a 2012 tax return Sarah's home computer is listed property because it is not used at a regular business establishment. Filing a 2012 tax return She does not use the computer predominantly for qualified business use. Filing a 2012 tax return Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. Filing a 2012 tax return She must depreciate it using the straight line method over the ADS recovery period. Filing a 2012 tax return Her combined business/investment use for determining her depreciation deduction is 90%. Filing a 2012 tax return Example 2. Filing a 2012 tax return If Sarah uses her computer 30% of the time to manage her investments and 60% of the time in her consumer research business, it is used predominantly for qualified business use. Filing a 2012 tax return She can elect a section 179 deduction and, if she does not deduct all the computer's cost, she can claim a special depreciation allowance and depreciate the computer using the 200% declining balance method over the GDS recovery period. Filing a 2012 tax return Her combined business/investment use for determining her depreciation deduction is 90%. Filing a 2012 tax return Recapture of Excess Depreciation If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. Filing a 2012 tax return You also increase the adjusted basis of your property by the same amount. Filing a 2012 tax return Excess depreciation is: The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus The depreciation that would have been allowable for those years if you had not used the property predominantly for qualified business use in the year you placed it in service. Filing a 2012 tax return To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. Filing a 2012 tax return Example. Filing a 2012 tax return In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. Filing a 2012 tax return She used it only for qualified business use for 2009 through 2012. Filing a 2012 tax return Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. Filing a 2012 tax return She began depreciating it using the 200% DB method over a 5-year GDS recovery period. Filing a 2012 tax return The pickup truck's gross vehicle weight was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the Passenger Automobile Limits Apply. Filing a 2012 tax return During 2013, she used the truck 50% for business and 50% for personal purposes. Filing a 2012 tax return She includes $4,018 excess depreciation in her gross income for 2013. Filing a 2012 tax return The excess depreciation is determined as follows. Filing a 2012 tax return Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. Filing a 2012 tax return (Depreciation is from Table A-1. Filing a 2012 tax return ) $16,618 Minus: Depreciation allowable (Table A-8):     2009 – 10% of $18,000 $1,800   2010 – 20% of $18,000 3,600   2011 – 20% of $18,000 3,600   2012 – 20% of $18,000 3,600 12,600 Excess depreciation $4,018 If Ellen's use of the truck does not change to 50% for business and 50% for personal purposes until 2015, there will be no excess depreciation. Filing a 2012 tax return The total depreciation allowable using Table A-8 through 2015 will be $18,000, which equals the total of the section 179 deduction and depreciation she will have claimed. Filing a 2012 tax return Where to figure and report recapture. Filing a 2012 tax return   Use Form 4797, Part IV, to figure the recapture amount. Filing a 2012 tax return Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. Filing a 2012 tax return For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. Filing a 2012 tax return If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. Filing a 2012 tax return Lessee's Inclusion Amount If you use leased listed property other than a passenger automobile for business/investment use, you must include an amount in your income in the first year your qualified business-use percentage is 50% or less. Filing a 2012 tax return Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). Filing a 2012 tax return For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. Filing a 2012 tax return The inclusion amount is the sum of Amount A and Amount B, described next. Filing a 2012 tax return However, see the special rules for the inclusion amount, later, if your lease begins in the last 9 months of your tax year or is for less than one year. Filing a 2012 tax return Amount A. Filing a 2012 tax return   Amount A is: The fair market value of the property, multiplied by The business/investment use for the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A-19 in Appendix A . Filing a 2012 tax return   The fair market value of the property is the value on the first day of the lease term. Filing a 2012 tax return If the capitalized cost of an item of listed property is specified in the lease agreement, you must treat that amount as the fair market value. Filing a 2012 tax return Amount B. Filing a 2012 tax return   Amount B is: The fair market value of the property, multiplied by The average of the business/investment use for all tax years the property was leased that precede the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A–20 in Appendix A . Filing a 2012 tax return Maximum inclusion amount. Filing a 2012 tax return   The inclusion amount cannot be more than the sum of the deductible amounts of rent for the tax year in which the lessee must include the amount in gross income. Filing a 2012 tax return Inclusion amount worksheet. Filing a 2012 tax return   The following worksheet is provided to help you figure the inclusion amount for leased listed property. Filing a 2012 tax return Inclusion Amount Worksheet for Leased Listed Property 1. Filing a 2012 tax return Fair market value   2. Filing a 2012 tax return Business/investment use for first year business use is 50% or less   3. Filing a 2012 tax return Multiply line 1 by line 2. Filing a 2012 tax return   4. Filing a 2012 tax return Rate (%) from Table A-19   5. Filing a 2012 tax return Multiply line 3 by line 4. Filing a 2012 tax return This is Amount A. Filing a 2012 tax return   6. Filing a 2012 tax return Fair market value   7. Filing a 2012 tax return Average business/investment use for years property leased before the first year business use is 50% or less . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return . Filing a 2012 tax return   8. Filing a 2012 tax return Multiply line 6 by line 7   9. Filing a 2012 tax return Rate (%) from Table A-20   10. Filing a 2012 tax return Multiply line 8 by line 9. Filing a 2012 tax return This is Amount B. Filing a 2012 tax return   11. Filing a 2012 tax return Add line 5 and line 10. Filing a 2012 tax return This is your inclusion amount. Filing a 2012 tax return Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Filing a 2012 tax return )         Example. Filing a 2012 tax return On February 1, 2011, Larry House, a calendar year taxpayer, leased and placed in service a computer with a fair market value of $3,000. Filing a 2012 tax return The lease is for a period of 5 years. Filing a 2012 tax return Larry does not use the computer at a regular business establishment, so it is listed property. Filing a 2012 tax return His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. Filing a 2012 tax return He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. Filing a 2012 tax return The computer has a 5-year recovery period under both GDS and ADS. Filing a 2012 tax return 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. Filing a 2012 tax return 8%. Filing a 2012 tax return The applicable percentage from Table A-20 is 22. Filing a 2012 tax return 0%. Filing a 2012 tax return Larry's deductible rent for the computer for 2013 is $800. Filing a 2012 tax return Larry uses the Inclusion amount worksheet. Filing a 2012 tax return to figure the amount he must include in income for 2013. Filing a 2012 tax return His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). Filing a 2012 tax return Inclusion Amount Worksheet for Leased Listed Property 1. Filing a 2012 tax return Fair market value $3,000   2. Filing a 2012 tax return Business/investment use for first year business use is 50% or less 40 % 3. Filing a 2012 tax return Multiply line 1 by line 2. Filing a 2012 tax return 1,200   4. Filing a 2012 tax return Rate (%) from Table A-19 −19. Filing a 2012 tax return 8 % 5. Filing a 2012 tax return Multiply line 3 by line 4. Filing a 2012 tax return This is Amount A. Filing a 2012 tax return −238   6. Filing a 2012 tax return Fair market value 3,000   7. Filing a 2012 tax return Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. Filing a 2012 tax return Multiply line 6 by line 7 2,100   9. Filing a 2012 tax return Rate (%) from Table A-20 22. Filing a 2012 tax return 0 % 10. Filing a 2012 tax return Multiply line 8 by line 9. Filing a 2012 tax return This is Amount B. Filing a 2012 tax return 462   11. Filing a 2012 tax return Add line 5 and line 10. Filing a 2012 tax return This is your inclusion amount. Filing a 2012 tax return Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Filing a 2012 tax return ) $224           Lease beginning in the last 9 months of your tax year. Filing a 2012 tax return    The inclusion amount is subject to a special rule if all the following apply. Filing a 2012 tax return The lease term begins within 9 months before the close of your tax year. Filing a 2012 tax return You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. Filing a 2012 tax return The lease term continues into your next tax year. Filing a 2012 tax return Under this special rule, add the inclusion amount to income in the next tax year. Filing a 2012 tax return Figure the inclusion amount by taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount Worksheet for Leased Listed Property) and the applicable percentage for the tax year the lease term begins. Filing a 2012 tax return Skip lines 6 through 9 of the worksheet and enter zero on line 10. Filing a 2012 tax return Example 1. Filing a 2012 tax return On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. Filing a 2012 tax return The property is 5-year property with a fair market value of $10,000. Filing a 2012 tax return Her property has a recovery period of 5 years under ADS. Filing a 2012 tax return The lease is for 5 years. Filing a 2012 tax return Her business use of the property was 50% in 2012 and 90% in 2013. Filing a 2012 tax return She paid rent of $3,600 for 2012, of which $3,240 is deductible. Filing a 2012 tax return She must include $147 in income in 2013. Filing a 2012 tax return The $147 is the sum of Amount A and Amount B. Filing a 2012 tax return Amount A is $147 ($10,000 × 70% × 2. Filing a 2012 tax return 1%), the product of the fair market value, the average business use for 2012 and 2013, and the applicable percentage for year one from Table A-19 . Filing a 2012 tax return Amount B is zero. Filing a 2012 tax return Lease for less than one year. Filing a 2012 tax return   A special rule for the inclusion amount applies if the lease term is less than one year and you do not use the property predominantly (more than 50%) for qualified business use. Filing a 2012 tax return The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. Filing a 2012 tax return The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). Filing a 2012 tax return   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. Filing a 2012 tax return If you have two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat them as one lease. Filing a 2012 tax return Example 2. Filing a 2012 tax return On October 1, 2012, John Joyce, a calendar year taxpayer, leased and placed in service an item of listed property that is 3-year property. Filing a 2012 tax return This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. Filing a 2012 tax return The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. Filing a 2012 tax return He must include $71 in income in 2013. Filing a 2012 tax return The $71 is the sum of Amount A and Amount B. Filing a 2012 tax return Amount A is $71 ($15,000 × 45% × 2. Filing a 2012 tax return 1% × 183/365), the product of the fair market value, the average business use for both years, and the applicable percentage for year one from Table A-19 , prorated for the length of the lease. Filing a 2012 tax return Amount B is zero. Filing a 2012 tax return Where to report inclusion amount. Filing a 2012 tax return   Report the inclusion amount figured as described in the preceding discussions as other income on the same form or schedule on which you took the deduction for your rental costs. Filing a 2012 tax return For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. Filing a 2012 tax return If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. Filing a 2012 tax return Do the Passenger Automobile Limits Apply? The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited. Filing a 2012 tax return This section describes the maximum depreciation deduction amounts for 2013 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limit. Filing a 2012 tax return Exception for leased cars. Filing a 2012 tax return   The passenger automobile limits generally do not apply to passenger automobiles leased or held for leasing by anyone regularly engaged in the business of leasing passenger automobiles. Filing a 2012 tax return For information on when you are considered regularly engaged in the business of leasing listed property, including passenger automobiles, see Exception for leased property , earlier, under What Is the Business-Use Requirement . Filing a 2012 tax return Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. Filing a 2012 tax return They are based on the date you placed the automobile in service. Filing a 2012 tax return Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. Filing a 2012 tax return Maximum Depreciation Deduction for Passenger Automobiles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,1601 $5,100 $3,050 $1,875 2012 11,1601 5,100 3,050 1,875 2011 11,0602 4,900 2,950 1,775 2010 11,0602  4,900 2,950 1,775 2009 10,9603 4,800 2,850 1,775 2008 10,9603  4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6104 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7105 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6606 4,900 2,950 1,775 1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Filing a 2012 tax return 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. Filing a 2012 tax return 3If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960. Filing a 2012 tax return 4If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $2,960. Filing a 2012 tax return 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. Filing a 2012 tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Filing a 2012 tax return 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Filing a 2012 tax return If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year. Filing a 2012 tax return If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. Filing a 2012 tax return The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. Filing a 2012 tax return Example. Filing a 2012 tax return On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. Filing a 2012 tax return She used the car only in her business. Filing a 2012 tax return She files her tax return based on the calendar year. Filing a 2012 tax return She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Filing a 2012 tax return Under MACRS, a car is 5-year property. Filing a 2012 tax return Since she placed her car in service on April 15 and used it only for business, she uses the percentages in Table A-1 to figure her MACRS depreciation on the car. Filing a 2012 tax return Virginia multiplies the $14,500 unadjusted basis of her car by 0. Filing a 2012 tax return 20 to get her MACRS depreciation of $2,900 for 2013. Filing a 2012 tax return This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. Filing a 2012 tax return She can deduct the full $2,900. Filing a 2012 tax return Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. Filing a 2012 tax return The maximum deduction amounts for electric vehicles placed in service after August 5, 1997, and before January 1, 2007, are shown in the following table. Filing a 2012 tax return Owners of electric vehicles placed in service after December 31, 2006, should use the table of maximum deduction amounts later for electric vehicles classified as passenger automobiles or use the table of maximum deduction amounts for trucks and vans later, for electric vehicles classified as trucks and vans. Filing a 2012 tax return Maximum Depreciation Deduction For Electric Vehicles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2006 $8,980 $14,400 $8,650 $5,225 2005 8,880 14,200 8,450 5,125 2004 31,8301 14,300 8,550 5,125 5/06/2003– 12/31/2003 32,0302 14,600 8,750 5,225 1/01/2003– 5/05/2003 22,8803 14,600 8,750 5,225 1If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $8,880. Filing a 2012 tax return 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. Filing a 2012 tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Filing a 2012 tax return 3 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Filing a 2012 tax return Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. Filing a 2012 tax return The maximum deduction amounts for trucks and vans are shown in the following table. Filing a 2012 tax return Maximum Depreciation Deduction For Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 11,3601 5,300 3,150 1,875 2011 11,2602 5,200 3,150 1,875 2010 11,1603 5,100 3,050 1,875 2009 11,0604 4,900 2,950 1,775 2008 11,1605 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2006 3,260 5,200 3,150 1,875 2005 3,260 5,200 3,150 1,875 2004 10,9106 5,300 3,150 1,875 5/06/2003– 12/31/2003 11,0107 5,400 3,250 1,975 1/01/2003– 5/05/2003 7,9608 5,400 3,250 1,975 1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,360. Filing a 2012 tax return 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. Filing a 2012 tax return 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Filing a 2012 tax return 4 If you elect not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,060. Filing a 2012 tax return 5If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,160. Filing a 2012 tax return 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, or the maximum deduction is $3,260. Filing a 2012 tax return 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. Filing a 2012 tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Filing a 2012 tax return 8 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Filing a 2012 tax return Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. Filing a 2012 tax return Then use the information from this worksheet to prepare Form 4562. Filing a 2012 tax return Depreciation Worksheet for Passenger Automobiles   Part I   1. Filing a 2012 tax return MACRS system (GDS or ADS)     2. Filing a 2012 tax return Property class     3. Filing a 2012 tax return Date placed in service     4. Filing a 2012 tax return Recovery period     5. Filing a 2012 tax return Method and convention     6. Filing a 2012 tax return Depreciation rate (from tables)     7. Filing a 2012 tax return Maximum depreciation deduction for this year from the appropriate table       8. Filing a 2012 tax return Business/investment-use percentage       9. Filing a 2012 tax return Multiply line 7 by line 8. Filing a 2012 tax return This is your adjusted maximum depreciation deduction       10. Filing a 2012 tax return Section 179 deduction claimed this year (not more than line 9). Filing a 2012 tax return Enter -0- if this is not the year you placed the car in service. Filing a 2012 tax return         Note. Filing a 2012 tax return  1) If line 10 is equal to line 9, stop here. Filing a 2012 tax return Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. Filing a 2012 tax return  2) If line 10 is less than line 9, complete Part II. Filing a 2012 tax return   Part II   11. Filing a 2012 tax return Subtract line 10 from line 9. Filing a 2012 tax return This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. Filing a 2012 tax return Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. Filing a 2012 tax return Multiply line 12 by line 8. Filing a 2012 tax return This is your business/investment cost       14. Filing a 2012 tax return Section 179 deduction claimed in the year you placed the car in service       15. Filing a 2012 tax return Subtract line 14 from line 13. Filing a 2012 tax return This is your tentative basis for depreciation       16. Filing a 2012 tax return Multiply line 15 by . Filing a 2012 tax return 50 if the 50% special depreciation allowance applies. Filing a 2012 tax return This is your special depreciation allowance. Filing a 2012 tax return Enter -0- if this is not the year you placed the car in service, the car is not qualified property, or you elected not to claim a special depreciation allowance       Note 1) If line 16 is equal to line 11, stop here. Filing a 2012 tax return Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. Filing a 2012 tax return  2) If line 16 is less than line 11, complete Part III. Filing a 2012 tax return   Part III   17. Filing a 2012 tax return Subtract line 16 from 11. Filing a 2012 tax return This is the limit on the amount you can deduct for MACRS depreciation       18. Filing a 2012 tax return Subtract line 16 from line 15. Filing a 2012 tax return This is your basis for depreciation. Filing a 2012 tax return       19. Filing a 2012 tax return Multiply line 18 by line 6. Filing a 2012 tax return This is your tentative MACRS depreciation deduction. Filing a 2012 tax return       20. Filing a 2012 tax return Enter the lesser of line 17 or line 19. Filing a 2012 tax return This is your MACRS depreciation deduction. Filing a 2012 tax return     1 When figuring the amount to enter on line 12, do not reduce your cost or other basis by any section 179 deduction you claimed for your car. Filing a 2012 tax return 2 Reduce the basis by the lesser of $4,000 or 10% of the cost of the vehicle even if the credit is less than that amount. Filing a 2012 tax return             Deductions After the Recovery Period If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. Filing a 2012 tax return If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. Filing a 2012 tax return You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. Filing a 2012 tax return The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage. Filing a 2012 tax return See Maximum Depreciation Deduction , earlier. Filing a 2012 tax return Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use and the passenger automobile limits had not applied. Filing a 2012 tax return You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. Filing a 2012 tax return There is no unrecovered basis at the end of the recovery period because you are considered to have used this property 100% for business and investment purposes during all of the recovery period. Filing a 2012 tax return Example. Filing a 2012 tax return In May 2007, you bought and placed in service a car costing $31,500. Filing a 2012 tax return The car was 5-year property under GDS (MACRS). Filing a 2012 tax return You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Filing a 2012 tax return You used the car exclusively for business during the recovery period (2007 through 2012). Filing a 2012 tax return You figured your depreciation as shown below. Filing a 2012 tax return Year Percentage Amount Limit   Allowed 2007 20. Filing a 2012 tax return 0% $6,300 $2,960   $2,960 2008 32. Filing a 2012 tax return 0 10,080 4,800   4,800 2009 19. Filing a 2012 tax return 2 6,048 2,850   2,850 2010 11. Filing a 2012 tax return 52 3,629 1,675   1,675 2011 11. Filing a 2012 tax return 52 3,629 1,675   1,675 2012 5. Filing a 2012 tax return 76 1,814 1,675   1,675 Total   $15,635 At the end of 2012, you had an unrecovered basis of $15,865 ($31,500 − $15,635). Filing a 2012 tax return If in 2013 and later years you continue to use the car 100% for business, you can deduct each year the lesser of $1,675 or your remaining unrecovered basis. Filing a 2012 tax return If your business use of the car had been less than 100% during any year, your depreciation deduction would have been less than the maximum amount allowable for that year. Filing a 2012 tax return However, in figuring your unrecovered basis in the car, you would still reduce your basis by the maximum amount allowable as if the business use had been 100%. Filing a 2012 tax return For example, if you had used your car 60% for business instead of 100%, your allowable depreciation deductions would have been $9,519 ($15,865 × 60%), but you still would have to reduce your basis by $15,865 to determine your unrecovered basis. Filing a 2012 tax return Deductions For Passenger Automobiles Acquired in a Trade-in If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. Filing a 2012 tax return Depreciate the part of the new automobile's basis that exceeds its carryover basis (excess basis) as if it were newly placed in service property. Filing a 2012 tax return This excess basis is the additional cash paid for the new automobile in the trade-in. Filing a 2012 tax return The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. Filing a 2012 tax return Special rules apply in determining the passenger automobile limits. Filing a 2012 tax return These rules and examples are discussed in section 1. Filing a 2012 tax return 168(i)-6(d)(3) of the regulations. Filing a 2012 tax return Instead of figuring depreciation for the carryover basis and the excess basis separately, you can elect to treat the old automobile as disposed of and both of the basis components for the new automobile as if placed in service at the time of the trade-in. Filing a 2012 tax return For more information, including how to make this election, see Election out under Property Acquired in a Like-kind Exchange or Involuntary Conversion in chapter 4 and sections 1. Filing a 2012 tax return 168(i)-6(i) and 1. Filing a 2012 tax return 168(i)-6(j) of the regulations. Filing a 2012 tax return What Records Must Be Kept? You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove your business/investment use with adequate records or with sufficient evidence to support your own statements. Filing a 2012 tax return For listed property, you must keep records for as long as any recapture can still occur. Filing a 2012 tax return Recapture can occur in any tax year of the recovery period. Filing a 2012 tax return Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. Filing a 2012 tax return You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. Filing a 2012 tax return However, your records should back up your receipts in an orderly manner. Filing a 2012 tax return Elements of expenditure or use. Filing a 2012 tax return   Your records or other documentary evidence must support all the following. Filing a 2012 tax return The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses. Filing a 2012 tax return The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year. Filing a 2012 tax return The date of the expenditure or use. Filing a 2012 tax return The business or investment purpose for the expenditure or use. Filing a 2012 tax return   Written documents of your expenditure or use are generally better evidence than oral statements alone. Filing a 2012 tax return You do not have to keep a daily log. Filing a 2012 tax return However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time of the expenditure or use and backed up by other documents is preferable to a statement you prepare later. Filing a 2012 tax return Timeliness. Filing a 2012 tax return   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. Filing a 2012 tax return An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use generally is considered a timely record if, in the regular course of business: The statement is given by an employee to the employer, or The statement is given by an independent contractor to the client or customer. Filing a 2012 tax return   For example, a log maintained on a weekly basis, that accounts for use during the week, will be considered a record made at or near the time of use. Filing a 2012 tax return Business purpose supported. Filing a 2012 tax return   Generally, an adequate record of business purpose must be in the form of a written statement. Filing a 2012 tax return However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. Filing a 2012 tax return A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. Filing a 2012 tax return For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. Filing a 2012 tax return Business use supported. Filing a 2012 tax return   An adequate record contains enough information on each element of every business or investment use. Filing a 2012 tax return The amount of detail required to support the use depends on the facts and circumstances. Filing a 2012 tax return For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of the truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. Filing a 2012 tax return   Although you generally must prepare an adequate written record, you can prepare a record of the business use of listed property in a computer memory device that uses a logging program. Filing a 2012 tax return Separate or combined expenditures or uses. Filing a 2012 tax return   Each use by you normally is considered a separate use. Filing a 2012 tax return However, you can combine repeated uses as a single item. Filing a 2012 tax return   Record each expenditure as a separate item. Filing a 2012 tax return Do not combine it with other expenditures. Filing a 2012 tax return If you choose, however, you can combine amounts you spent for the use of listed property during a tax year, such as for gasoline or automobile repairs. Filing a 2012 tax return If you combine these expenses, you do not need to support the business purpose of each expense. Filing a 2012 tax return Instead, you can divide the expenses based on the total business use of the listed property. Filing a 2012 tax return   You can account for uses that can be considered part of a single use, such as a round trip or uninterrupted business use, by a single record. Filing a 2012 tax return For example, you can account for the use of a truck to make deliveries at several locations that begin and end at the business premises and can include a stop at the business in between deliveries by a single record of miles driven. Filing a 2012 tax return You can account for the use of a passenger automobile by a salesperson for a business trip away from home over a period of time by a single record of miles traveled. Filing a 2012 tax return Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. Filing a 2012 tax return Confidential information. Filing a 2012 tax return   If any of the information on the elements of an expenditure or use is confidential, you do not need to include it in the account book or similar record if you record it at or near the time of the expenditure or use. Filing a 2012 tax return You must keep it elsewhere and make it available as support to the IRS director for your area on request. Filing a 2012 tax return Substantial compliance. Filing a 2012 tax return   If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the satisfaction of the IRS director for your area, you can establish this element by any evidence the IRS director for your area deems adequate. Filing a 2012 tax return   If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied with the adequate records requirement for an element of an expenditure or use, you must establish the element as follows. Filing a 2012 tax return By your own oral or written statement containing detailed information as to the element. Filing a 2012 tax return By other evidence sufficient to establish the element. Filing a 2012 tax return   If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct evidence, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. Filing a 2012 tax return If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. Filing a 2012 tax return Sampling. Filing a 2012 tax return   You can maintain an adequate record for part of a tax year and use that record to support your business and investment use of listed property for the entire tax year if it can be shown by other evidence that the periods for which you maintain an adequate record are representative of the use throughout the year. Filing a 2012 tax return Example 1. Filing a 2012 tax return Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. Filing a 2012 tax return She uses her automobile for local business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and deliver items to clients. Filing a 2012 tax return There is no other business use of the automobile, but she and family members also use it for personal purposes. Filing a 2012 tax return She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. Filing a 2012 tax return Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. Filing a 2012 tax return If there is no change in circumstances, such as the purchase of a second car for exclusive use in her business, the determination that her combined business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Filing a 2012 tax return Example 2. Filing a 2012 tax return Assume the same facts as in Example 1, except that Denise maintains adequate records during the first week of every month showing that 75% of her use of the automobile is for business. Filing a 2012 tax return Her business invoices show that her business continued at the same rate during the later weeks of each month so that her weekly records are representative of the automobile's business use throughout the month. Filing a 2012 tax return The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Filing a 2012 tax return Example 3. Filing a 2012 tax return Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. Filing a 2012 tax return For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. Filing a 2012 tax return During these weeks, his business use of the automobile does not follow a consistent pattern. Filing a 2012 tax return During the fourth week of each month, he delivers all business orders taken during the previous month. Filing a 2012 tax return The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. Filing a 2012 tax return The determination based on the record maintained during the fourth week of the month that his business/investment use of the automobile for the tax year is 70% does not rest on sufficient supporting evidence because his use during that week is not representative of use during other periods. Filing a 2012 tax return Loss of records. Filing a 2012 tax return   When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. Filing a 2012 tax return How Is Listed Property Information Reported? You must provide the information about your listed property requested in Part V of Form 4562, Section A, if you claim either of the following deductions. Filing a 2012 tax return Any deduction for a vehicle. Filing a 2012 tax return A depreciation deduction for any other listed property. Filing a 2012 tax return If you claim any deduction for a vehicle, you also must provide the information requested in Section B. Filing a 2012 tax return If you provide the vehicle for your employee's use, the employee must give you this information. Filing a 2012 tax return If you provide any vehicle for use by an employee, you must first answer the questions in Section C to see if you meet an exception to completing Section B for that vehicle. Filing a 2012 tax return Vehicles used by your employees. Filing a 2012 tax return   You do not have to complete Section B, Part V, for vehicles used by your employees who are not more-than-5% owners or related persons if you meet at least one of the following requirements. Filing a 2012 tax return You maintain a written policy statement that prohibits one of the following uses of the vehicles. Filing a 2012 tax return All personal use including commuting. Filing a 2012 tax return Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. Filing a 2012 tax return You treat all use of the vehicles by your employees as personal use. Filing a 2012 tax return You provide more than five vehicles for use by your employees, and you keep in your records the information on their use given to you by the employees. Filing a 2012 tax return For demonstrator automobiles provided to full-time salespersons, you maintain a written policy statement that limits the total mileage outside the salesperson's normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store personal possessions. Filing a 2012 tax return Exceptions. Filing a 2012 tax return   If you file Form 2106, 2106-EZ, or Schedule C-EZ (Form 1040), and you are not required to file Form 4562, report information about listed property on that form and not on Form 4562. Filing a 2012 tax return Also, if you file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for any other reason, report vehicle information in Part IV of Schedule C and not on Form 4562. Filing a 2012 tax return Prev  Up  Next   Home   More Online Publications