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Forms To File 2012 Taxes

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Forms To File 2012 Taxes

Forms to file 2012 taxes 5. Forms to file 2012 taxes   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. Forms to file 2012 taxes Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. Forms to file 2012 taxes When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. Forms to file 2012 taxes Otherwise, these are capital expenses that must be added to the basis of the land. Forms to file 2012 taxes (See chapter 6 for information on determining basis. Forms to file 2012 taxes ) Conservation expenses for land in a foreign country do not qualify for this special treatment. Forms to file 2012 taxes The deduction for conservation expenses cannot be more than 25% of your gross income from farming. Forms to file 2012 taxes See 25% Limit on Deduction , later. Forms to file 2012 taxes Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. Forms to file 2012 taxes These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. Forms to file 2012 taxes You must include in income most government payments for approved conservation practices. Forms to file 2012 taxes However, you can exclude some payments you receive under certain cost-sharing conservation programs. Forms to file 2012 taxes For more information, see Agricultural Program Payments in chapter 3. Forms to file 2012 taxes To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. Forms to file 2012 taxes Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. Forms to file 2012 taxes You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. Forms to file 2012 taxes You are not farming if you are engaged only in forestry or the growing of timber. Forms to file 2012 taxes Farm defined. Forms to file 2012 taxes   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Forms to file 2012 taxes It also includes plantations, ranches, ranges, and orchards. Forms to file 2012 taxes A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. Forms to file 2012 taxes It does not include an area where they are merely caught or harvested. Forms to file 2012 taxes A plant nursery is a farm for purposes of deducting soil and water conservation expenses. Forms to file 2012 taxes Farm rental. Forms to file 2012 taxes   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. Forms to file 2012 taxes If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. Forms to file 2012 taxes   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. Forms to file 2012 taxes Example. Forms to file 2012 taxes You own a farm in Iowa and live in California. Forms to file 2012 taxes You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. Forms to file 2012 taxes You cannot deduct your soil conservation expenses for this farm. Forms to file 2012 taxes You must capitalize the expenses and add them to the basis of the land. Forms to file 2012 taxes     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. Forms to file 2012 taxes Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. Forms to file 2012 taxes If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. Forms to file 2012 taxes Keep a copy of the plan with your books and records to support your deductions. Forms to file 2012 taxes Conservation plan. Forms to file 2012 taxes   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. Forms to file 2012 taxes There are three types of approved plans. Forms to file 2012 taxes NRCS individual site plans. Forms to file 2012 taxes These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. Forms to file 2012 taxes NRCS county plans. Forms to file 2012 taxes These plans include a listing of farm conservation practices approved for the county where the farmland is located. Forms to file 2012 taxes You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. Forms to file 2012 taxes Comparable state agency plans. Forms to file 2012 taxes These plans are approved by state agencies and can be approved individual site plans or county plans. Forms to file 2012 taxes   A list of NRCS conservation programs is available at www. Forms to file 2012 taxes nrcs. Forms to file 2012 taxes usda. Forms to file 2012 taxes gov/programs. Forms to file 2012 taxes Individual site plans can be obtained from NRCS offices and the comparable state agencies. Forms to file 2012 taxes Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. Forms to file 2012 taxes These expenses include, but are not limited to, the following. Forms to file 2012 taxes The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. Forms to file 2012 taxes The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. Forms to file 2012 taxes The eradication of brush. Forms to file 2012 taxes The planting of windbreaks. Forms to file 2012 taxes You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. Forms to file 2012 taxes These expenses are added to the basis of the land. Forms to file 2012 taxes If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. Forms to file 2012 taxes See chapter 3 for information about payments eligible for the cost-sharing exclusion. Forms to file 2012 taxes New farm or farmland. Forms to file 2012 taxes   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. Forms to file 2012 taxes You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. Forms to file 2012 taxes The new farming activity does not have to be the same as the old farming activity. Forms to file 2012 taxes For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. Forms to file 2012 taxes Land not used for farming. Forms to file 2012 taxes   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. Forms to file 2012 taxes For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. Forms to file 2012 taxes You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. Forms to file 2012 taxes Depreciable conservation assets. Forms to file 2012 taxes   You generally cannot deduct your expenses for depreciable conservation assets. Forms to file 2012 taxes However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. Forms to file 2012 taxes See Assessment for Depreciable Property , later. Forms to file 2012 taxes   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. Forms to file 2012 taxes These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. Forms to file 2012 taxes You recover your capital investment through annual allowances for depreciation. Forms to file 2012 taxes   You can deduct soil and water conservation expenses for nondepreciable earthen items. Forms to file 2012 taxes Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. Forms to file 2012 taxes Water well. Forms to file 2012 taxes   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. Forms to file 2012 taxes It is a capital expense. Forms to file 2012 taxes You recover your cost through depreciation. Forms to file 2012 taxes You also must capitalize your cost for drilling a test hole. Forms to file 2012 taxes If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. Forms to file 2012 taxes You can recover the total cost through depreciation deductions. Forms to file 2012 taxes   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. Forms to file 2012 taxes Abandonment means that all economic benefits from the well are terminated. Forms to file 2012 taxes For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. Forms to file 2012 taxes Endangered species recovery expenses. Forms to file 2012 taxes   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. Forms to file 2012 taxes Otherwise, these are capital expenses that must be added to the basis of the land. Forms to file 2012 taxes   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. Forms to file 2012 taxes See Internal Revenue Code section 175 for more information. Forms to file 2012 taxes Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. Forms to file 2012 taxes You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. Forms to file 2012 taxes Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. Forms to file 2012 taxes This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. Forms to file 2012 taxes The depreciable property must be used in the district's soil and water conservation activities. Forms to file 2012 taxes However, the following limits apply to these assessments. Forms to file 2012 taxes The total assessment limit. Forms to file 2012 taxes The yearly assessment limit. Forms to file 2012 taxes After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. Forms to file 2012 taxes The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. Forms to file 2012 taxes See Table 5-1 for a brief summary of these limits. Forms to file 2012 taxes Table 5-1. Forms to file 2012 taxes Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. Forms to file 2012 taxes Your deductible share of the cost to the district for the property. Forms to file 2012 taxes Your gross income from farming. Forms to file 2012 taxes No one taxpayer can deduct more than 10% of the total assessment. Forms to file 2012 taxes Any amount over 10% is a capital expense and is added to the basis of your land. Forms to file 2012 taxes If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Forms to file 2012 taxes If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. Forms to file 2012 taxes You can deduct the remainder in equal amounts over the next 9 tax years. Forms to file 2012 taxes Limit for all conservation expenses, including assessments for depreciable property. Forms to file 2012 taxes Amounts greater than 25% can be carried to the following year and added to that year's expenses. Forms to file 2012 taxes The total is then subject to the 25% of gross income from farming limit in that year. Forms to file 2012 taxes To ensure your deduction is within the deduction limits, keep records to show the following. Forms to file 2012 taxes The total assessment against all members of the district for the depreciable property. Forms to file 2012 taxes Your deductible share of the cost to the district for the depreciable property. Forms to file 2012 taxes Your gross income from farming. Forms to file 2012 taxes Total assessment limit. Forms to file 2012 taxes   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. Forms to file 2012 taxes This applies whether you pay the assessment in one payment or in installments. Forms to file 2012 taxes If your assessment is more than 10% of the total amount assessed, both the following rules apply. Forms to file 2012 taxes The amount over 10% is a capital expense and is added to the basis of your land. Forms to file 2012 taxes If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Forms to file 2012 taxes Yearly assessment limit. Forms to file 2012 taxes   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. Forms to file 2012 taxes If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. Forms to file 2012 taxes If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. Forms to file 2012 taxes You can deduct the remainder in equal amounts over the next 9 tax years. Forms to file 2012 taxes Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. Forms to file 2012 taxes Example 1. Forms to file 2012 taxes This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. Forms to file 2012 taxes Of the assessment, $1,500 is for digging drainage ditches. Forms to file 2012 taxes You can deduct this part as a soil or conservation expense as if you had paid it directly. Forms to file 2012 taxes The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. Forms to file 2012 taxes The total amount assessed by the district against all its members for the depreciable equipment is $7,000. Forms to file 2012 taxes The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. Forms to file 2012 taxes The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. Forms to file 2012 taxes To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. Forms to file 2012 taxes Add $500 to the result for a total of $570. Forms to file 2012 taxes Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). Forms to file 2012 taxes You can deduct the balance at the rate of $70 a year over the next 9 years. Forms to file 2012 taxes You add $70 to the $1,500 portion of the assessment for drainage ditches. Forms to file 2012 taxes You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. Forms to file 2012 taxes Example 2. Forms to file 2012 taxes Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. Forms to file 2012 taxes The total amount assessed by the district against all its members for depreciable equipment is $5,500. Forms to file 2012 taxes The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. Forms to file 2012 taxes The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). Forms to file 2012 taxes Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. Forms to file 2012 taxes You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. Forms to file 2012 taxes Sale or other disposal of land during 9-year period. Forms to file 2012 taxes   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. Forms to file 2012 taxes Death of farmer during 9-year period. Forms to file 2012 taxes   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. Forms to file 2012 taxes 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. Forms to file 2012 taxes Gross income from farming. Forms to file 2012 taxes   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. Forms to file 2012 taxes Gains from sales of draft, breeding, or dairy livestock are included. Forms to file 2012 taxes Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. Forms to file 2012 taxes Carryover of deduction. Forms to file 2012 taxes   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. Forms to file 2012 taxes However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. Forms to file 2012 taxes Example. Forms to file 2012 taxes In 2012, you have gross income of $32,000 from two farms. Forms to file 2012 taxes During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. Forms to file 2012 taxes However, your deduction is limited to 25% of $32,000, or $8,000. Forms to file 2012 taxes The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. Forms to file 2012 taxes The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. Forms to file 2012 taxes Any expenses over the limit in that year are carried to 2014 and later years. Forms to file 2012 taxes Net operating loss. Forms to file 2012 taxes   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. Forms to file 2012 taxes If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. Forms to file 2012 taxes When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. Forms to file 2012 taxes If you do not choose to deduct the expenses, you must capitalize them. Forms to file 2012 taxes Change of method. Forms to file 2012 taxes   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. Forms to file 2012 taxes To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. Forms to file 2012 taxes You or your authorized representative must sign the request. Forms to file 2012 taxes   The request must include the following information. Forms to file 2012 taxes Your name and address. Forms to file 2012 taxes The first tax year the method or change of method is to apply. Forms to file 2012 taxes Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. Forms to file 2012 taxes If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. Forms to file 2012 taxes The total expenses you paid or incurred in the first tax year the method or change of method is to apply. Forms to file 2012 taxes A statement that you will account separately in your books for the expenses to which this method or change of method relates. Forms to file 2012 taxes Send your request to the following  address. Forms to file 2012 taxes  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. Forms to file 2012 taxes Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). Forms to file 2012 taxes However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. Forms to file 2012 taxes Gain on sale of farmland. Forms to file 2012 taxes   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. Forms to file 2012 taxes If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. Forms to file 2012 taxes See Section 1252 property under Other Gains in chapter 9. 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LP 68 Frequently Asked Questions (FAQs)

What is the notice telling me?

We have released the Notice of Levy sent to you previously regarding the taxpayer named in the letter.

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You are no longer required to turn over any money, property, or rights to property belonging to this taxpayer.

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The levy release is effective immediately upon receipt by you. No other action is required on your part.

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Page Last Reviewed or Updated: 30-Jan-2014

The Forms To File 2012 Taxes

Forms to file 2012 taxes Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Forms to file 2012 taxes Computer used in a home office. Forms to file 2012 taxes Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Forms to file 2012 taxes You can claim the amount of expenses that is more than 2% of your adjusted gross income. Forms to file 2012 taxes You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Forms to file 2012 taxes Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Forms to file 2012 taxes Generally, you apply the 2% limit after you apply any other deduction limit. Forms to file 2012 taxes For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit. Forms to file 2012 taxes Deductions subject to the 2% limit are discussed in the following three categories. Forms to file 2012 taxes Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Forms to file 2012 taxes Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Forms to file 2012 taxes Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Forms to file 2012 taxes Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Forms to file 2012 taxes You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. Forms to file 2012 taxes An expense is ordinary if it is common and accepted in your trade, business, or profession. Forms to file 2012 taxes An expense is necessary if it is appropriate and helpful to your business. Forms to file 2012 taxes An expense does not have to be required to be considered necessary. Forms to file 2012 taxes You may be able to deduct the following items as unreimbursed employee expenses. Forms to file 2012 taxes Business bad debt of an employee. Forms to file 2012 taxes Business liability insurance premiums. Forms to file 2012 taxes Damages paid to a former employer for breach of an employment contract. Forms to file 2012 taxes Depreciation on a computer your employer requires you to use in your work. Forms to file 2012 taxes Dues to a chamber of commerce if membership helps you do your job. Forms to file 2012 taxes Dues to professional societies. Forms to file 2012 taxes Educator expenses. Forms to file 2012 taxes Home office or part of your home used regularly and exclusively in your work. Forms to file 2012 taxes Job search expenses in your present occupation. Forms to file 2012 taxes Laboratory breakage fees. Forms to file 2012 taxes Legal fees related to your job. Forms to file 2012 taxes Licenses and regulatory fees. Forms to file 2012 taxes Malpractice insurance premiums. Forms to file 2012 taxes Medical examinations required by an employer. Forms to file 2012 taxes Occupational taxes. Forms to file 2012 taxes Passport for a business trip. Forms to file 2012 taxes Repayment of an income aid payment received under an employer's plan. Forms to file 2012 taxes Research expenses of a college professor. Forms to file 2012 taxes Rural mail carriers' vehicle expenses. Forms to file 2012 taxes Subscriptions to professional journals and trade magazines related to your work. Forms to file 2012 taxes Tools and supplies used in your work. Forms to file 2012 taxes Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Forms to file 2012 taxes Union dues and expenses. Forms to file 2012 taxes Work clothes and uniforms if required and not suitable for everyday use. Forms to file 2012 taxes Work-related education. Forms to file 2012 taxes Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Forms to file 2012 taxes Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Forms to file 2012 taxes A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Forms to file 2012 taxes Example. Forms to file 2012 taxes You make a bona fide loan to the corporation you work for. Forms to file 2012 taxes It fails to pay you back. Forms to file 2012 taxes You had to make the loan in order to keep your job. Forms to file 2012 taxes You have a business bad debt as an employee. Forms to file 2012 taxes More information. Forms to file 2012 taxes   For more information on business bad debts, see chapter 10 in Publication 535. Forms to file 2012 taxes For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Forms to file 2012 taxes Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Forms to file 2012 taxes Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Forms to file 2012 taxes Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Forms to file 2012 taxes For the convenience of your employer. Forms to file 2012 taxes   This means that your use of the computer is for a substantial business reason of your employer. Forms to file 2012 taxes You must consider all facts in making this determination. Forms to file 2012 taxes Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Forms to file 2012 taxes Required as a condition of your employment. Forms to file 2012 taxes   This means that you cannot properly perform your duties without the computer. Forms to file 2012 taxes Whether you can properly perform your duties without it depends on all the facts and circumstances. Forms to file 2012 taxes It is not necessary that your employer explicitly requires you to use your computer. Forms to file 2012 taxes But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Forms to file 2012 taxes Example. Forms to file 2012 taxes You are an engineer with an engineering firm. Forms to file 2012 taxes You occasionally take work home at night rather than work late at the office. Forms to file 2012 taxes You own and use a computer that is similar to the one you use at the office to complete your work at home. Forms to file 2012 taxes Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Forms to file 2012 taxes Which depreciation method to use. Forms to file 2012 taxes   The depreciation method you use depends on whether you meet the more-than-50%-use test. Forms to file 2012 taxes More-than-50%-use test met. Forms to file 2012 taxes   You meet this test if you use the computer more than 50% in your work. Forms to file 2012 taxes If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Forms to file 2012 taxes In addition, you may be able to take the section 179 deduction for the year you place the item in service. Forms to file 2012 taxes More-than-50%-use test not met. Forms to file 2012 taxes   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Forms to file 2012 taxes You also cannot claim the section 179 deduction. Forms to file 2012 taxes (But if you use your computer in a home office, see the exception below. Forms to file 2012 taxes ) Investment use. Forms to file 2012 taxes   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Forms to file 2012 taxes However, you can combine your investment use with your work use in figuring your depreciation deduction. Forms to file 2012 taxes Exception for computer used in a home office. Forms to file 2012 taxes   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Forms to file 2012 taxes You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Forms to file 2012 taxes You also may be able to take a section 179 deduction for the year you place the computer in service. Forms to file 2012 taxes See Computer used in a home office under How To Report, later. Forms to file 2012 taxes More information. Forms to file 2012 taxes   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Forms to file 2012 taxes Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Forms to file 2012 taxes Reporting your depreciation deduction. Forms to file 2012 taxes    See How To Report, later, for information about reporting a deduction for depreciation. Forms to file 2012 taxes You must keep records to prove your percentage of business and investment use. Forms to file 2012 taxes Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Forms to file 2012 taxes Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Forms to file 2012 taxes Lobbying and political activities. Forms to file 2012 taxes    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Forms to file 2012 taxes See Lobbying Expenses under Nondeductible Expenses, later. Forms to file 2012 taxes Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Forms to file 2012 taxes If you file Form 1040A, you can deduct these expenses on line 16. Forms to file 2012 taxes If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Forms to file 2012 taxes However, neither spouse can deduct more than $250 of his or her qualified expenses. Forms to file 2012 taxes Eligible educator. Forms to file 2012 taxes   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Forms to file 2012 taxes Qualified expenses. Forms to file 2012 taxes   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Forms to file 2012 taxes An ordinary expense is one that is common and accepted in your educational field. Forms to file 2012 taxes A necessary expense is one that is helpful and appropriate for your profession as an educator. Forms to file 2012 taxes An expense does not have to be required to be considered necessary. Forms to file 2012 taxes   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Forms to file 2012 taxes You must reduce your qualified expenses by the following amounts. Forms to file 2012 taxes Excludable U. Forms to file 2012 taxes S. Forms to file 2012 taxes series EE and I savings bond interest from Form 8815. Forms to file 2012 taxes Nontaxable qualified state tuition program earnings. Forms to file 2012 taxes Nontaxable earnings from Coverdell education savings accounts. Forms to file 2012 taxes Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Forms to file 2012 taxes Educator expenses over limit. Forms to file 2012 taxes   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Forms to file 2012 taxes Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Forms to file 2012 taxes You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Forms to file 2012 taxes The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Forms to file 2012 taxes Principal place of business. Forms to file 2012 taxes   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Forms to file 2012 taxes   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Forms to file 2012 taxes You should keep records that will give the information needed to figure the deduction according to these rules. Forms to file 2012 taxes Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Forms to file 2012 taxes More information. Forms to file 2012 taxes   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Forms to file 2012 taxes Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Forms to file 2012 taxes You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Forms to file 2012 taxes Employment and outplacement agency fees. Forms to file 2012 taxes    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Forms to file 2012 taxes Employer pays you back. Forms to file 2012 taxes   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Forms to file 2012 taxes See Recoveries in Publication 525. Forms to file 2012 taxes Employer pays the employment agency. Forms to file 2012 taxes   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Forms to file 2012 taxes Résumé. Forms to file 2012 taxes   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Forms to file 2012 taxes Travel and transportation expenses. Forms to file 2012 taxes   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Forms to file 2012 taxes You can deduct the travel expenses if the trip is primarily to look for a new job. Forms to file 2012 taxes The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Forms to file 2012 taxes   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Forms to file 2012 taxes    You can choose to use the standard mileage rate to figure your car expenses. Forms to file 2012 taxes The 2013 rate for business use of a vehicle is 56½ cents per mile. Forms to file 2012 taxes See Publication 463 for more information on travel and car expenses. Forms to file 2012 taxes Legal Fees You can deduct legal fees related to doing or keeping your job. Forms to file 2012 taxes Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Forms to file 2012 taxes Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Forms to file 2012 taxes If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Forms to file 2012 taxes Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Forms to file 2012 taxes If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Forms to file 2012 taxes Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Forms to file 2012 taxes You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Forms to file 2012 taxes However, you cannot deduct the cost of travel as a form of education. Forms to file 2012 taxes Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Forms to file 2012 taxes See chapter 4 of Publication 463 for more information. Forms to file 2012 taxes Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Forms to file 2012 taxes You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Forms to file 2012 taxes For more information about depreciation, see Publication 946. Forms to file 2012 taxes Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Forms to file 2012 taxes Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Forms to file 2012 taxes Travel expenses. Forms to file 2012 taxes   Travel expenses are those incurred while traveling away from home for your employer. Forms to file 2012 taxes You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Forms to file 2012 taxes Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Forms to file 2012 taxes   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Forms to file 2012 taxes ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Forms to file 2012 taxes   Travel expenses are discussed more fully in chapter 1 of Publication 463. Forms to file 2012 taxes Temporary work assignment. Forms to file 2012 taxes    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Forms to file 2012 taxes Indefinite work assignment. Forms to file 2012 taxes   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Forms to file 2012 taxes If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Forms to file 2012 taxes Federal crime investigation and prosecution. Forms to file 2012 taxes   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Forms to file 2012 taxes This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Forms to file 2012 taxes   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Forms to file 2012 taxes Armed Forces reservists traveling more than 100 miles from home. Forms to file 2012 taxes   If you are a member of a reserve component of the Armed Forces of the United States 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 some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Forms to file 2012 taxes The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Forms to file 2012 taxes The balance, if any, is reported on Schedule A. Forms to file 2012 taxes   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, 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. Forms to file 2012 taxes   For more information on travel expenses, see Publication 463. Forms to file 2012 taxes Local transportation expenses. Forms to file 2012 taxes   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Forms to file 2012 taxes They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Forms to file 2012 taxes   You can choose to use the standard mileage rate to figure your car expenses. Forms to file 2012 taxes The 2013 rate for business use of a vehicle is 56½ cents per mile. Forms to file 2012 taxes    In general, the costs of commuting between your residence and your place of business are nondeductible. Forms to file 2012 taxes Work at two places in a day. Forms to file 2012 taxes   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Forms to file 2012 taxes Temporary work location. Forms to file 2012 taxes   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Forms to file 2012 taxes The work location is outside the metropolitan area where you live and normally work. Forms to file 2012 taxes You have at least one regular work location (other than your home) for the same trade or business. Forms to file 2012 taxes (If this applies, the distance between your home and the temporary work location does not matter. Forms to file 2012 taxes )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Forms to file 2012 taxes It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Forms to file 2012 taxes If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Forms to file 2012 taxes For more information, see chapter 1 of Publication 463. Forms to file 2012 taxes Home office. Forms to file 2012 taxes   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Forms to file 2012 taxes (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Forms to file 2012 taxes ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Forms to file 2012 taxes Meals and entertainment. Forms to file 2012 taxes   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Forms to file 2012 taxes However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Forms to file 2012 taxes   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Forms to file 2012 taxes You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Forms to file 2012 taxes Meals when subject to “hours of service” limits. Forms to file 2012 taxes   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Forms to file 2012 taxes You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Forms to file 2012 taxes Gift expenses. Forms to file 2012 taxes   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Forms to file 2012 taxes The following items do not count toward the $25 limit. Forms to file 2012 taxes Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Forms to file 2012 taxes Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Forms to file 2012 taxes Local lodging. Forms to file 2012 taxes   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Forms to file 2012 taxes   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Forms to file 2012 taxes Additional information. Forms to file 2012 taxes    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Forms to file 2012 taxes Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Forms to file 2012 taxes You can also deduct assessments for benefit payments to unemployed union members. Forms to file 2012 taxes However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Forms to file 2012 taxes Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Forms to file 2012 taxes You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Forms to file 2012 taxes See Lobbying Expenses under Nondeductible Expenses, later. Forms to file 2012 taxes Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Forms to file 2012 taxes You must wear them as a condition of your employment. Forms to file 2012 taxes The clothes are not suitable for everyday wear. Forms to file 2012 taxes It is not enough that you wear distinctive clothing. Forms to file 2012 taxes The clothing must be specifically required by your employer. Forms to file 2012 taxes Nor is it enough that you do not, in fact, wear your work clothes away from work. Forms to file 2012 taxes The clothing must not be suitable for taking the place of your regular clothing. Forms to file 2012 taxes Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Forms to file 2012 taxes ). Forms to file 2012 taxes Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Forms to file 2012 taxes However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Forms to file 2012 taxes Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Forms to file 2012 taxes Protective clothing. Forms to file 2012 taxes   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Forms to file 2012 taxes   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Forms to file 2012 taxes Military uniforms. Forms to file 2012 taxes   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Forms to file 2012 taxes However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Forms to file 2012 taxes In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Forms to file 2012 taxes   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Forms to file 2012 taxes   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Forms to file 2012 taxes However, you can deduct the cost of insignia, shoulder boards, and related items. Forms to file 2012 taxes    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Forms to file 2012 taxes Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Forms to file 2012 taxes It maintains or improves skills required in your present work. Forms to file 2012 taxes It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Forms to file 2012 taxes You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Forms to file 2012 taxes If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Forms to file 2012 taxes If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Forms to file 2012 taxes Travel as education. Forms to file 2012 taxes   You cannot deduct the cost of travel that in itself constitutes a form of education. Forms to file 2012 taxes For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Forms to file 2012 taxes More information. Forms to file 2012 taxes    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Forms to file 2012 taxes Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Forms to file 2012 taxes Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Forms to file 2012 taxes Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Forms to file 2012 taxes Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Forms to file 2012 taxes These fees include the cost of tax preparation software programs and tax publications. Forms to file 2012 taxes They also include any fee you paid for electronic filing of your return. Forms to file 2012 taxes See Tax preparation fees under How To Report, later. Forms to file 2012 taxes Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Forms to file 2012 taxes On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Forms to file 2012 taxes You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Forms to file 2012 taxes These other expenses include the following items. Forms to file 2012 taxes Appraisal fees for a casualty loss or charitable contribution. Forms to file 2012 taxes Casualty and theft losses from property used in performing services as an employee. Forms to file 2012 taxes Clerical help and office rent in caring for investments. Forms to file 2012 taxes Depreciation on home computers used for investments. Forms to file 2012 taxes Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Forms to file 2012 taxes Fees to collect interest and dividends. Forms to file 2012 taxes Hobby expenses, but generally not more than hobby income. Forms to file 2012 taxes Indirect miscellaneous deductions from pass-through entities. Forms to file 2012 taxes Investment fees and expenses. Forms to file 2012 taxes Legal fees related to producing or collecting taxable income or getting tax advice. Forms to file 2012 taxes Loss on deposits in an insolvent or bankrupt financial institution. Forms to file 2012 taxes Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Forms to file 2012 taxes Repayments of income. Forms to file 2012 taxes Repayments of social security benefits. Forms to file 2012 taxes Safe deposit box rental, except for storing jewelry and other personal effects. Forms to file 2012 taxes Service charges on dividend reinvestment plans. Forms to file 2012 taxes Tax advice fees. Forms to file 2012 taxes Trustee's fees for your IRA, if separately billed and paid. Forms to file 2012 taxes If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Forms to file 2012 taxes Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Forms to file 2012 taxes Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Forms to file 2012 taxes First report the loss in Section B of Form 4684, Casualties and Thefts. Forms to file 2012 taxes You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Forms to file 2012 taxes To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Forms to file 2012 taxes For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Forms to file 2012 taxes Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Forms to file 2012 taxes Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Forms to file 2012 taxes The fees are deductible on the return for the year in which you paid them. Forms to file 2012 taxes For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Forms to file 2012 taxes Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Forms to file 2012 taxes You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Forms to file 2012 taxes But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Forms to file 2012 taxes For more information on depreciation, see Publication 946. Forms to file 2012 taxes Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Forms to file 2012 taxes Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Forms to file 2012 taxes The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Forms to file 2012 taxes For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Forms to file 2012 taxes Fees To Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Forms to file 2012 taxes But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Forms to file 2012 taxes You must add the fee to the cost of the property. Forms to file 2012 taxes You cannot deduct the fee you pay to a broker to sell securities. Forms to file 2012 taxes You can use the fee only to figure gain or loss from the sale. Forms to file 2012 taxes See the instructions for Schedule D (Form 1040) for information on how to report the fee. Forms to file 2012 taxes Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Forms to file 2012 taxes A hobby is not a business because it is not carried on to make a profit. Forms to file 2012 taxes See Not-for-Profit Activities in chapter 1 of Publication 535. Forms to file 2012 taxes Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Forms to file 2012 taxes Deductions of pass-through entities are passed through to the partners or shareholders. Forms to file 2012 taxes The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Forms to file 2012 taxes Example. Forms to file 2012 taxes You are a member of an investment club that is formed solely to invest in securities. Forms to file 2012 taxes The club is treated as a partnership. Forms to file 2012 taxes The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Forms to file 2012 taxes In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Forms to file 2012 taxes However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Forms to file 2012 taxes Publicly offered mutual funds. Forms to file 2012 taxes   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Forms to file 2012 taxes A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Forms to file 2012 taxes   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Forms to file 2012 taxes This net figure is the amount you report on your return as income. Forms to file 2012 taxes You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Forms to file 2012 taxes Information returns. Forms to file 2012 taxes   You should receive information returns from pass-through entities. Forms to file 2012 taxes Partnerships and S corporations. Forms to file 2012 taxes   These entities issue Schedule K-1, which lists the items and amounts you must report, and identifies the tax return schedules and lines to use. Forms to file 2012 taxes Nonpublicly offered mutual funds. Forms to file 2012 taxes   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Forms to file 2012 taxes You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Forms to file 2012 taxes Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Forms to file 2012 taxes Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Forms to file 2012 taxes You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Forms to file 2012 taxes You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Forms to file 2012 taxes You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Forms to file 2012 taxes See Tax Preparation Fees, earlier. Forms to file 2012 taxes Unlawful discrimination claims. Forms to file 2012 taxes   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Forms to file 2012 taxes S. Forms to file 2012 taxes Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Forms to file 2012 taxes However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Forms to file 2012 taxes See Publication 525 for more information. Forms to file 2012 taxes Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Forms to file 2012 taxes If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Forms to file 2012 taxes If elected, the casualty loss is subject to certain deduction limitations. Forms to file 2012 taxes The election is made on Form 4684. Forms to file 2012 taxes Once you make this choice, you cannot change it without IRS approval. Forms to file 2012 taxes If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Forms to file 2012 taxes As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Forms to file 2012 taxes Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Forms to file 2012 taxes This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Forms to file 2012 taxes As a casualty loss. Forms to file 2012 taxes Report it on Form 4684 first and then on Schedule A (Form 1040). Forms to file 2012 taxes See Publication 547 for details. Forms to file 2012 taxes As a nonbusiness bad debt. Forms to file 2012 taxes Report it on Schedule D (Form 1040). Forms to file 2012 taxes If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Forms to file 2012 taxes Exception. Forms to file 2012 taxes   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Forms to file 2012 taxes For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Forms to file 2012 taxes Actual loss different from estimated loss. Forms to file 2012 taxes   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Forms to file 2012 taxes See Recoveries in Publication 525. Forms to file 2012 taxes If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Forms to file 2012 taxes Choice not made. Forms to file 2012 taxes   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Forms to file 2012 taxes See Nonbusiness Bad Debts in chapter 4 of Publication 550. Forms to file 2012 taxes Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Forms to file 2012 taxes For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Forms to file 2012 taxes Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Forms to file 2012 taxes If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Forms to file 2012 taxes If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Forms to file 2012 taxes Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Forms to file 2012 taxes The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Forms to file 2012 taxes The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Forms to file 2012 taxes It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Forms to file 2012 taxes If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Forms to file 2012 taxes See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Forms to file 2012 taxes Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Forms to file 2012 taxes You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Forms to file 2012 taxes Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Forms to file 2012 taxes These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Forms to file 2012 taxes Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Forms to file 2012 taxes Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Forms to file 2012 taxes They are not subject to the 2% limit. Forms to file 2012 taxes Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Forms to file 2012 taxes List of Deductions Amortizable premium on taxable bonds. Forms to file 2012 taxes Casualty and theft losses from income-producing property. Forms to file 2012 taxes Federal estate tax on income in respect of a decedent. Forms to file 2012 taxes Gambling losses up to the amount of gambling winnings. Forms to file 2012 taxes Impairment-related work expenses of persons with disabilities. Forms to file 2012 taxes Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Forms to file 2012 taxes Losses from Ponzi-type investment schemes. Forms to file 2012 taxes Repayments of more than $3,000 under a claim of right. Forms to file 2012 taxes Unrecovered investment in an annuity. Forms to file 2012 taxes Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Forms to file 2012 taxes You can elect to amortize the premium on taxable bonds. Forms to file 2012 taxes The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Forms to file 2012 taxes Pre-1998 election to amortize bond premium. Forms to file 2012 taxes   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Forms to file 2012 taxes Bonds acquired after October 22, 1986, and before 1988. Forms to file 2012 taxes   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Forms to file 2012 taxes Bonds acquired before October 23, 1986. Forms to file 2012 taxes   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Forms to file 2012 taxes Deduction for excess premium. Forms to file 2012 taxes   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Forms to file 2012 taxes If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Forms to file 2012 taxes However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Forms to file 2012 taxes If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Forms to file 2012 taxes    Pre-1998 choice to amortize bond premium. Forms to file 2012 taxes If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Forms to file 2012 taxes More information. Forms to file 2012 taxes    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Forms to file 2012 taxes Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Forms to file 2012 taxes First report the loss in Section B of Form 4684. Forms to file 2012 taxes You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Forms to file 2012 taxes To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Forms to file 2012 taxes For more information on casualty and theft losses, see Publication 547. Forms to file 2012 taxes Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Forms to file 2012 taxes Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Forms to file 2012 taxes See Publication 559 for information about figuring the amount of this deduction. Forms to file 2012 taxes Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Forms to file 2012 taxes You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Forms to file 2012 taxes You cannot deduct gambling losses that are more than your winnings. Forms to file 2012 taxes Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Forms to file 2012 taxes You cannot reduce your gambling winnings by your gambling losses and report the difference. Forms to file 2012 taxes You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Forms to file 2012 taxes Therefore, your records should show your winnings separately from your losses. Forms to file 2012 taxes Diary of winnings and losses. Forms to file 2012 taxes You must keep an accurate diary or similar record of your losses and winnings. Forms to file 2012 taxes Your diary should contain at least the following information. Forms to file 2012 taxes The date and type of your specific wager or wagering activity. Forms to file 2012 taxes The name and address or location of the gambling establishment. Forms to file 2012 taxes The names of other persons present with you at the gambling establishment. Forms to file 2012 taxes The amount(s) you won or lost. Forms to file 2012 taxes Proof of winnings and losses. Forms to file 2012 taxes   In addition to your diary, you should also have other documentation. Forms to file 2012 taxes You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Forms to file 2012 taxes   For specific wagering transactions, you can use the following items to support your winnings and losses. Forms to file 2012 taxes    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Forms to file 2012 taxes They are not all-inclusive. Forms to file 2012 taxes Your tax liability depends on your particular facts and circumstances. Forms to file 2012 taxes Keno. Forms to file 2012 taxes   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Forms to file 2012 taxes Slot machines. Forms to file 2012 taxes   A record of the machine number and all winnings by date and time the machine was played. Forms to file 2012 taxes Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Forms to file 2012 taxes ). Forms to file 2012 taxes   The number of the table at which you were playing. Forms to file 2012 taxes Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Forms to file 2012 taxes Bingo. Forms to file 2012 taxes   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Forms to file 2012 taxes Supplemental records include any receipts from the casino, parlor, etc. Forms to file 2012 taxes Racing (horse, harness, dog, etc. Forms to file 2012 taxes ). Forms to file 2012 taxes   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Forms to file 2012 taxes Supplemental records include unredeemed tickets and payment records from the racetrack. Forms to file 2012 taxes Lotteries. Forms to file 2012 taxes   A record of ticket purchases, dates, winnings, and losses. Forms to file 2012 taxes Supplemental records include unredeemed tickets, payment slips, and winnings statements. Forms to file 2012 taxes Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Forms to file 2012 taxes Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Forms to file 2012 taxes Example. Forms to file 2012 taxes You are blind. Forms to file 2012 taxes You must use a reader to do your work. Forms to file 2012 taxes You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Forms to file 2012 taxes The reader's services are only for your work. Forms to file 2012 taxes You can deduct your expenses for the reader as impairment-related work expenses. Forms to file 2012 taxes Self-employed. Forms to file 2012 taxes   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Forms to file 2012 taxes See Impairment-related work expenses. Forms to file 2012 taxes , later under How To Report. Forms to file 2012 taxes Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Forms to file 2012 taxes S. Forms to file 2012 taxes trade or business). Forms to file 2012 taxes It is not subject to the passive activity limitations. Forms to file 2012 taxes Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Forms to file 2012 taxes See Publication 463 for more information. Forms to file 2012 taxes Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Forms to file 2012 taxes If you are an employee, complete Form 2106 or Form 2106-EZ. Forms to file 2012 taxes See Publication 463 for more information. Forms to file 2012 taxes Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Forms to file 2012 taxes You figure the deductible loss in Section B of Form 4684. Forms to file 2012 taxes However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Forms to file 2012 taxes Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Forms to file 2012 taxes You do not need to complete Appendix A. Forms to file 2012 taxes See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Forms to file 2012 taxes Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. Forms to file 2012 taxes See Repayments in Publication 525 for more information. Forms to file 2012 taxes Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Forms to file 2012 taxes If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Forms to file 2012 taxes See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Forms to file 2012 taxes Nondeductible Expenses You cannot deduct the following expenses. Forms to file 2012 taxes List of Nondeductible Expenses Adoption expenses. Forms to file 2012 taxes Broker's commissions. Forms to file 2012 taxes Burial or funeral expenses, including the cost of a cemetery lot. Forms to file 2012 taxes Campaign expenses. Forms to file 2012 taxes Capital expenses. Forms to file 2012 taxes Check-writing fees. Forms to file 2012 taxes Club dues. Forms to file 2012 taxes Commuting expenses. Forms to file 2012 taxes Fees and licenses, such as car licenses, marriage licenses, and dog tags. Forms to file 2012 taxes Fines and penalties, such as parking tickets. Forms to file 2012 taxes Health spa expenses. Forms to file 2012 taxes Hobby losses—but see Hobby Expenses, earlier. Forms to file 2012 taxes Home repairs, insurance, and rent. Forms to file 2012 taxes Home security system. Forms to file 2012 taxes Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Forms to file 2012 taxes Investment-related seminars. Forms to file 2012 taxes Life insurance premiums paid by the insured. Forms to file 2012 taxes Lobbying expenses. Forms to file 2012 taxes Losses from the sale of your home, furniture, personal car, etc. Forms to file 2012 taxes Lost or misplaced cash or property. Forms to file 2012 taxes Lunches with co-workers. Forms to file 2012 taxes Meals while working late. Forms to file 2012 taxes Medical expenses as business expenses other than medical examinations required by your employer. Forms to file 2012 taxes Personal disability insurance premiums. Forms to file 2012 taxes Personal legal expenses. Forms to file 2012 taxes Personal, living, or family expenses. Forms to file 2012 taxes Political contributions. Forms to file 2012 taxes Professional accreditation fees. Forms to file 2012 taxes Professional reputation, expenses to improve. Forms to file 2012 taxes Relief fund contributions. Forms to file 2012 taxes Residential telephone line. Forms to file 2012 taxes Stockholders' meeting, expenses of attending. Forms to file 2012 taxes Tax-exempt income, expenses of earning or collecting. Forms to file 2012 taxes The value of wages never received or lost vacation time. Forms to file 2012 taxes Travel expenses for another individual. Forms to file 2012 taxes Voluntary unemployment benefit fund contributions. Forms to file 2012 taxes Wristwatches. Forms to file 2012 taxes Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Forms to file 2012 taxes For details, see Form 8839, Qualified Adoption Expenses. Forms to file 2012 taxes Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Forms to file 2012 taxes Instead, these fees must be added to the taxpayer's cost of the securities. Forms to file 2012 taxes Commissions paid on the sale are deductible as business expenses only by dealers. Forms to file 2012 taxes Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Forms to file 2012 taxes These include qualification and registration fees for primary elections. Forms to file 2012 taxes Legal fees. Forms to file 2012 taxes   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Forms to file 2012 taxes Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Forms to file 2012 taxes If you use such property in your work, you may be able to take a depreciation deduction. Forms to file 2012 taxes See Publication 946. Forms to file 2012 taxes If the property is a car used in your work, also see Publication 463. Forms to file 2012 taxes Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Forms to file 2012 taxes Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Forms to file 2012 taxes This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Forms to file 2012 taxes You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Forms to file 2012 taxes Dues paid to airline, hotel, and luncheon clubs are not deductible. Forms to file 2012 taxes Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Forms to file 2012 taxes If you haul tools, instruments, or other items in your car to and from work, you can deduct only the additional cost of hauling the items, such as the rent on a trailer to carry the items. Forms to file 2012 taxes Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Forms to file 2012 taxes This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Forms to file 2012 taxes Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Forms to file 2012 taxes Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Forms to file 2012 taxes Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Forms to file 2012 taxes However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Forms to file 2012 taxes See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Forms to file 2012 taxes Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Forms to file 2012 taxes Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Forms to file 2012 taxes You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Forms to file 2012 taxes See Publication 504, Divorced or Separated Individuals, for information on alimony. Forms to file 2012 taxes Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Forms to file 2012 taxes These include expenses to: Influence legislation, Participate, or intervene, in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Forms to file 2012 taxes Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Forms to file 2012 taxes Covered executive branch official. Forms to file 2012 taxes   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Forms to file 2012 taxes The President. Forms to file 2012 taxes The Vice President. Forms to file 2012 taxes Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Forms to file 2012 taxes Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Forms to file 2012 taxes Dues used for lobbying. Forms to file 2012 taxes   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Forms to file 2012 taxes Exceptions. Forms to file 2012 taxes   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Forms to file 2012 taxes You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Forms to file 2012 taxes An Indian tribal government is considered a local council or similar governing body. Forms to file 2012 taxes You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Forms to file 2012 taxes If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Forms to file 2012 taxes Payments by the other person to you for lobbying activities cannot be deducted. Forms to file 2012 taxes Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Forms to file 2012 taxes However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Forms to file 2012 taxes See Publication 547. Forms to file 2012 taxes Example. Forms to file 2012 taxes A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Forms to file 2012 taxes The diamond falls from the ring and is never found. Forms to file 2012 taxes The loss of the diamond is a casualty. Forms to file 2012 taxes Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Forms to file 2012 taxes See Publication 463 for information on deductible expenses while traveling away from home. Forms to file 2012 taxes Meals While Working Late You cannot deduct the cost of meals while working late. Forms to file 2012 taxes However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Forms to file 2012 taxes See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Forms to file 2012 taxes Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Forms to file 2012 taxes Custody of children. Forms to file 2012 taxes Breach of promise to marry suit. Forms to file 2012 taxes Civil or criminal charges resulting from a personal relationship. Forms to file 2012 taxes Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Forms to file 2012 taxes For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Forms to file 2012 taxes Preparation of a title (or defense or perfection of a title). Forms to file 2012 taxes Preparation of a will. Forms to file 2012 taxes Property claims or property settlement in a divorce. Forms to file 2012 taxes You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Forms to file 2012 taxes Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Forms to file 2012 taxes Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Forms to file 2012 taxes Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Forms to file 2012 taxes Accounting certificate fees paid for the initial right to practice accounting. Forms to file 2012 taxes Bar exam fees and incidental expenses in securing initial admission to the bar. Forms to file 2012 taxes Medical and dental license fees paid to get initial licensing. Forms to file 2012 taxes Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Forms to file 2012 taxes Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Forms to file 2012 taxes Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Forms to file 2012 taxes Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Forms to file 2012 taxes You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Forms to file 2012 taxes Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Forms to file 2012 taxes You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Forms to file 2012 taxes If you have expenses to p