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Free 1040ez Tax Forms

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Free 1040ez Tax Forms

Free 1040ez tax forms 6. Free 1040ez tax forms   Estimated Tax Table of Contents Who Must Make Estimated Tax Payments Estimated tax is a method used to pay tax on income that is not subject to withholding. Free 1040ez tax forms This income includes self-employment income, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Free 1040ez tax forms Income tax generally is withheld from pensions and annuity payments you receive. Free 1040ez tax forms However, if the tax withheld from your pension (or other) income is not enough, you may have to pay estimated tax. Free 1040ez tax forms If you do not pay enough tax through withholding, by making estimated tax payments, or both, you may be charged a penalty. Free 1040ez tax forms Who Must Make Estimated Tax Payments If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Free 1040ez tax forms In most cases, you must pay estimated tax for 2014 if both of the following apply. Free 1040ez tax forms You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Free 1040ez tax forms You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Free 1040ez tax forms The 2013 tax return must cover all 12 months. Free 1040ez tax forms If all of your income will be subject to income tax withholding, you probably do not need to make estimated tax payments. Free 1040ez tax forms For more information on estimated tax, see Publication 505. Free 1040ez tax forms Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Wisconsin Department of Agriculture, Trade and Consumer Protection

Website: Wisconsin Department of Agriculture, Trade and Consumer Protection

Address: Wisconsin Department of Agriculture, Trade and Consumer Protection
Bureau of Consumer Protection
PO Box 8911
2811 Agriculture Dr.
Madison, WI 53708-8911

Phone Number: 608-224-4953

Toll-free: 1-800-422-7128 (WI)

TTY: 608-224-5058

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Financial Institutions

Website: Department of Financial Institutions

Address: Department of Financial Institutions
Bureau of Consumer Affairs
PO Box 8041
Madison, WI 53708-8041

Phone Number: 608-264-7969

TTY: 608-266-8818

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Office of the Commissioner of Insurance

Website: Office of the Commissioner of Insurance

Address: Office of the Commissioner of Insurance
125 S. Webster St.
Madison, WI 53703-3474

Phone Number: 608-266-3585

Toll-free: 1-800-236-8517 (WI)

TTY: 711 and ask for 608-266-3586

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Financial Institutions

Website: Department of Financial Institutions

Address: Department of Financial Institutions
Division of Securities
PO Box 1768
Madison, WI 53701-1768

Phone Number: 608-266-1064

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Service Commission

Website: Public Service Commission

Address: Public Service Commission
Consumer Affairs Unit
PO Box 7854
Madison, WI 53707-7854

Phone Number: 608-266-2001

Toll-free: 1-800-225-7729

TTY: 608-267-1479

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The Free 1040ez Tax Forms

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