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Free E File State Tax Return

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Free E File State Tax Return

Free e file state tax return 1. Free e file state tax return   Definitions You Need To Know Table of Contents Other options. Free e file state tax return Exception. Free e file state tax return Certain terms used in this publication are defined below. Free e file state tax return The same term used in another publication may have a slightly different meaning. Free e file state tax return Annual additions. Free e file state tax return   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Free e file state tax return Annual benefits. Free e file state tax return   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Free e file state tax return Business. Free e file state tax return   A business is an activity in which a profit motive is present and economic activity is involved. Free e file state tax return Service as a newspaper carrier under age 18 or as a public official is not a business. Free e file state tax return Common-law employee. Free e file state tax return   A common-law employee is any individual who, under common law, would have the status of an employee. Free e file state tax return A leased employee can also be a common-law employee. Free e file state tax return   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Free e file state tax return For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Free e file state tax return   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Free e file state tax return For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Free e file state tax return S. Free e file state tax return citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Free e file state tax return   However, an individual may be a common-law employee and a self-employed person as well. Free e file state tax return For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Free e file state tax return In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Free e file state tax return However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Free e file state tax return Compensation. Free e file state tax return   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Free e file state tax return You can generally define compensation as including all the following payments. Free e file state tax return Wages and salaries. Free e file state tax return Fees for professional services. Free e file state tax return Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Free e file state tax return Commissions and tips. Free e file state tax return Fringe benefits. Free e file state tax return Bonuses. Free e file state tax return   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Free e file state tax return   Compensation generally includes amounts deferred in the following employee benefit plans. Free e file state tax return These amounts are elective deferrals. Free e file state tax return Qualified cash or deferred arrangement (section 401(k) plan). Free e file state tax return Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Free e file state tax return Section 457 nonqualified deferred compensation plan. Free e file state tax return Section 125 cafeteria plan. Free e file state tax return   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Free e file state tax return The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Free e file state tax return Other options. Free e file state tax return   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Free e file state tax return The employee's wages as defined for income tax withholding purposes. Free e file state tax return The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Free e file state tax return The employee's social security wages (including elective deferrals). Free e file state tax return   Compensation generally cannot include either of the following items. Free e file state tax return Nontaxable reimbursements or other expense allowances. Free e file state tax return Deferred compensation (other than elective deferrals). Free e file state tax return SIMPLE plans. Free e file state tax return   A special definition of compensation applies for SIMPLE plans. Free e file state tax return See chapter 3. Free e file state tax return Contribution. Free e file state tax return   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Free e file state tax return Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Free e file state tax return Deduction. Free e file state tax return   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Free e file state tax return Limits apply to the amount deductible. Free e file state tax return Earned income. Free e file state tax return   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Free e file state tax return   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Free e file state tax return Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Free e file state tax return It includes income from licensing the use of property other than goodwill. Free e file state tax return   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Free e file state tax return   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Free e file state tax return Employer. Free e file state tax return   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Free e file state tax return A sole proprietor is treated as his or her own employer for retirement plan purposes. Free e file state tax return However, a partner is not an employer for retirement plan purposes. Free e file state tax return Instead, the partnership is treated as the employer of each partner. Free e file state tax return Highly compensated employee. Free e file state tax return   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Free e file state tax return Leased employee. Free e file state tax return   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Free e file state tax return Provides services to you under an agreement between you and a leasing organization. Free e file state tax return Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Free e file state tax return Performs services under your primary direction or control. Free e file state tax return Exception. Free e file state tax return   A leased employee is not treated as your employee if all the following conditions are met. Free e file state tax return Leased employees are not more than 20% of your non-highly compensated work force. Free e file state tax return The employee is covered under the leasing organization's qualified pension plan. Free e file state tax return The leasing organization's plan is a money purchase pension plan that has all the following provisions. Free e file state tax return Immediate participation. Free e file state tax return (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Free e file state tax return ) Full and immediate vesting. Free e file state tax return A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Free e file state tax return However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Free e file state tax return Net earnings from self-employment. Free e file state tax return   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Free e file state tax return Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Free e file state tax return   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Free e file state tax return   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Free e file state tax return You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Free e file state tax return   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Free e file state tax return It does not include income passed through to shareholders of S corporations. Free e file state tax return Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Free e file state tax return Distributions of other income or loss to limited partners are not net earnings from self-employment. Free e file state tax return   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Free e file state tax return Qualified plan. Free e file state tax return   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Free e file state tax return You can deduct contributions made to the plan for your employees. Free e file state tax return Earnings on these contributions are generally tax free until distributed at retirement. Free e file state tax return Profit-sharing, money purchase, and defined benefit plans are qualified plans. Free e file state tax return A 401(k) plan is also a qualified plan. Free e file state tax return Participant. Free e file state tax return   A participant is an eligible employee who is covered by your retirement plan. Free e file state tax return See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Free e file state tax return Partner. Free e file state tax return   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Free e file state tax return For retirement plans, a partner is treated as an employee of the partnership. Free e file state tax return Self-employed individual. Free e file state tax return   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Free e file state tax return Sole proprietors and partners are self-employed. Free e file state tax return Self-employment can include part-time work. Free e file state tax return   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Free e file state tax return See Common-law employee and Net earnings from self-employment , earlier. Free e file state tax return   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Free e file state tax return See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Free e file state tax return Sole proprietor. Free e file state tax return   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Free e file state tax return For retirement plans, a sole proprietor is treated as both an employer and an employee. Free e file state tax return Prev  Up  Next   Home   More Online Publications
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Choose the Account That Is Best for You

When it comes to finding a safe place to put your money, there are a lot of options. Savings accounts, checking accounts, certificates of deposit and money market accounts are popular choices. Each has different rules and benefits that fit different needs. When choosing the one that is right for you, consider:

  • Minimum deposit requirements- Some accounts can only be set up with a minimum dollar amount. If your account goes below the minimum the bank may not pay you interest on the money you deposited and you may be charged extra fees.
  • Limits on withdrawals- Can you take money out whenever you want? Are there any penalties for doing so?
  • Interest- How much (if anything) is paid and when: Daily, monthly, quarterly, yearly? To compare rates offered locally to those from financial institutions around the nation, visit bankrate.com
  • Deposit insurance- Make sure your bank is a member of the Federal Deposit Insurance Corporation. This organization protects the money in your checking and savings accounts, certificates of deposit and IRA accounts up to $250,000.
  • Credit unions- A credit union is a nonprofit, cooperative financial institution owned and run by its members. Like the FDIC does for banks, the National Credit Union Share Insurance Fund (NCUIF) insures a person's savings up to $250,000.
  • Convenience- How easy is it to put money in and take it out? Are there tellers or ATM machines close to where you work and live? Or would you receive most of your service via the telephone or Internet?

If you are considering a checking account or another type of account with check-writing privileges, add these items to your list of things to think about:

  • Number of checks- Is there a maximum number of checks you can write per month without incurring a charge?
  • Check fees- Is there a monthly fee for the account or a charge for each check you write?
  • Holds on checks- Is there a waiting period for checks to clear before you can withdraw the money from your account?
  • Overdrafts- If you write a check for more money than you have in your account, what happens? You may be able to link your checking account to a savings account to protect yourself.
  • Debit card fees- Are there fees for using your debit card?
  • strong>Account fees- Banks can charge fees on your checking or savings account to cover things like maintenance, withdrawals, or minimum balance rules. However, the bank must inform you of the fees up front as part of your account agreement and notify you when changes occur. Practices vary from bank to bank, but each must inform you of the fee change on your statement, in a separate letter, or in a pamphlet. The Federal Reserve has more information about account fees.
  • Bounced checks- It’s your responsibility to have sufficient funds in your account to cover the checks you write. If you try to cash a check, withdraw money, or use your debit card for an amount greater than the amount of money in your account, you can face a bounced check or overdraft fee. Your bank may pay for the item, but charge you a fee or deny the purchase and still charge you a fee. In addition, the business to which you wrote the check may charge you an additional returned check fee. Bounced checks can also blemish your credit record, so you may want to talk to your bank about overdraft protection. For more information, contact the Federal Reserve.

The Free E File State Tax Return

Free e file state tax return 5. Free e file state tax return   Taxes Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: When To Deduct Taxes Real Estate TaxesSeparate elections. Free e file state tax return Making the election. Free e file state tax return Form 3115. Free e file state tax return Income TaxesAccrual of contested income taxes. Free e file state tax return Employment Taxes Other TaxesAdditional Medicare Tax. Free e file state tax return What's New Additional Medicare Tax. Free e file state tax return  Beginning in 2013, you must withhold a 0. Free e file state tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Free e file state tax return Also, self-employed individuals may be required to pay Additional Medicare Tax on self-employment income. Free e file state tax return See Employment Taxes , and Self-employment tax , later. Free e file state tax return Introduction You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses. Free e file state tax return You cannot deduct federal income taxes, estate and gift taxes, or state inheritance, legacy, and succession taxes. Free e file state tax return Topics - This chapter discusses: When to deduct taxes Real estate taxes Income taxes Employment taxes Other taxes Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 334 Tax Guide for Small Business 510 Excise Taxes 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch SE (Form 1040) Self-Employment Tax 3115 Application for Change in Accounting Method 8959 Additional Medicare Tax See chapter 12 for information about getting publications and forms. Free e file state tax return When To Deduct Taxes Generally, you can only deduct taxes in the year you pay them. Free e file state tax return This applies whether you use the cash method or an accrual method of accounting. Free e file state tax return Under an accrual method, you can deduct a tax before you pay it if you meet the exception for recurring items discussed under Economic Performance in Publication 538. Free e file state tax return You can also elect to ratably accrue real estate taxes as discussed later under Real Estate Taxes . Free e file state tax return Limit on accrual of taxes. Free e file state tax return   A taxing jurisdiction can require the use of a date for accruing taxes that is earlier than the date it originally required. Free e file state tax return However, if you use an accrual method, and can deduct the tax before you pay it, use the original accrual date for the year of change and all future years to determine when you can deduct the tax. Free e file state tax return Example. Free e file state tax return Your state imposes a tax on personal property used in a trade or business conducted in the state. Free e file state tax return This tax is assessed and becomes a lien as of July 1 (accrual date). Free e file state tax return In 2013, the state changed the assessment and lien dates from July 1, 2014, to December 31, 2013, for property tax year 2014. Free e file state tax return Use the original accrual date (July 1, 2014) to determine when you can deduct the tax. Free e file state tax return You must also use the July 1 accrual date for all future years to determine when you can deduct the tax. Free e file state tax return Uniform capitalization rules. Free e file state tax return   Uniform capitalization rules apply to certain taxpayers who produce real property or tangible personal property for use in a trade or business or for sale to customers. Free e file state tax return They also apply to certain taxpayers who acquire property for resale. Free e file state tax return Under these rules, you either include certain costs in inventory or capitalize certain expenses related to the property, such as taxes. Free e file state tax return For more information, see chapter 1. Free e file state tax return Carrying charges. Free e file state tax return   Carrying charges include taxes you pay to carry or develop real estate or to carry, transport, or install personal property. Free e file state tax return You can elect to capitalize carrying charges not subject to the uniform capitalization rules if they are otherwise deductible. Free e file state tax return For more information, see chapter 7. Free e file state tax return Refunds of taxes. Free e file state tax return   If you receive a refund for any taxes you deducted in an earlier year, include the refund in income to the extent the deduction reduced your federal income tax in the earlier year. Free e file state tax return For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1. Free e file state tax return    You must include in income any interest you receive on tax refunds. Free e file state tax return Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. Free e file state tax return The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction. Free e file state tax return Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Free e file state tax return See Taxes for local benefits , later. Free e file state tax return If you use an accrual method, you generally cannot accrue real estate taxes until you pay them to the government authority. Free e file state tax return However, you can elect to ratably accrue the taxes during the year. Free e file state tax return See Electing to ratably accrue , later. Free e file state tax return Taxes for local benefits. Free e file state tax return   Generally, you cannot deduct taxes charged for local benefits and improvements that tend to increase the value of your property. Free e file state tax return These include assessments for streets, sidewalks, water mains, sewer lines, and public parking facilities. Free e file state tax return You should increase the basis of your property by the amount of the assessment. Free e file state tax return   You can deduct taxes for these local benefits only if the taxes are for maintenance, repairs, or interest charges related to those benefits. Free e file state tax return If part of the tax is for maintenance, repairs, or interest, you must be able to show how much of the tax is for these expenses to claim a deduction for that part of the tax. Free e file state tax return Example. Free e file state tax return To improve downtown commercial business, Waterfront City converted a downtown business area street into an enclosed pedestrian mall. Free e file state tax return The city assessed the full cost of construction, financed with 10-year bonds, against the affected properties. Free e file state tax return The city is paying the principal and interest with the annual payments made by the property owners. Free e file state tax return The assessments for construction costs are not deductible as taxes or as business expenses, but are depreciable capital expenses. Free e file state tax return The part of the payments used to pay the interest charges on the bonds is deductible as taxes. Free e file state tax return Charges for services. Free e file state tax return   Water bills, sewerage, and other service charges assessed against your business property are not real estate taxes, but are deductible as business expenses. Free e file state tax return Purchase or sale of real estate. Free e file state tax return   If real estate is sold, the real estate taxes must be allocated between the buyer and the seller. Free e file state tax return   The buyer and seller must allocate the real estate taxes according to the number of days in the real property tax year (the period to which the tax imposed relates) that each owned the property. Free e file state tax return Treat the seller as paying the taxes up to but not including the date of sale. Free e file state tax return Treat the buyer as paying the taxes beginning with the date of sale. Free e file state tax return You can usually find this information on the settlement statement you received at closing. Free e file state tax return   If you (the seller) use an accrual method and have not elected to ratably accrue real estate taxes, you are considered to have accrued your part of the tax on the date you sell the property. Free e file state tax return Example. Free e file state tax return Alberto Verde, a calendar year accrual method taxpayer, owns real estate in Olmo County. Free e file state tax return He has not elected to ratably accrue property taxes. Free e file state tax return November 30 of each year is the assessment and lien date for the current real property tax year, which is the calendar year. Free e file state tax return He sold the property on June 30, 2013. Free e file state tax return Under his accounting method he would not be able to claim a deduction for the taxes because the sale occurred before November 30. Free e file state tax return He is treated as having accrued his part of the tax, 181/366  (January 1–June 29), on June 30, and he can deduct it for 2013. Free e file state tax return Electing to ratably accrue. Free e file state tax return   If you use an accrual method, you can elect to accrue real estate tax related to a definite period ratably over that period. Free e file state tax return Example. Free e file state tax return Juan Sanchez is a calendar year taxpayer who uses an accrual method. Free e file state tax return His real estate taxes for the real property tax year, July 1, 2013, to June 30, 2014, are $1,200. Free e file state tax return July 1 is the assessment and lien date. Free e file state tax return If Juan elects to ratably accrue the taxes, $600 will accrue in 2013 ($1,200 × 6/12, July 1–December 31) and the balance will accrue in 2014. Free e file state tax return Separate elections. Free e file state tax return   You can elect to ratably accrue the taxes for each separate trade or business and for nonbusiness activities if you account for them separately. Free e file state tax return Once you elect to ratably accrue real estate taxes, you must use that method unless you get permission from the IRS to change. Free e file state tax return See Form 3115 , later. Free e file state tax return Making the election. Free e file state tax return   If you elect to ratably accrue the taxes for the first year in which you incur real estate taxes, attach a statement to your income tax return for that year. Free e file state tax return The statement should show all the following items. Free e file state tax return The trades or businesses to which the election applies and the accounting method or methods used. Free e file state tax return The period to which the taxes relate. Free e file state tax return The computation of the real estate tax deduction for that first year. Free e file state tax return   Generally, you must file your return by the due date (including extensions). Free e file state tax return However, if you timely filed your return for the year without electing to ratably accrue, you can still make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). Free e file state tax return Attach the statement to the amended return and write “Filed pursuant to section 301. Free e file state tax return 9100-2” on the statement. Free e file state tax return File the amended return at the same address where you filed the original return. Free e file state tax return Form 3115. Free e file state tax return    If you elect to ratably accrue real estate taxes for a year after the first year in which you incur real estate taxes, or if you want to revoke your election to ratably accrue real estate taxes, file Form 3115. Free e file state tax return For more information, including applicable time frames for filing, see the Instructions for Form 3115. Free e file state tax return Note. Free e file state tax return If you are filing an application for a change in accounting method filed after January 9, 2011, for a year of change ending after April 29, 2010, see Revenue Procedure 2011-14, 2011-4 I. Free e file state tax return R. Free e file state tax return B. Free e file state tax return 330, as modified and clarified by Revenue Procedure 2012-19, 2012-14 I. Free e file state tax return R. Free e file state tax return B. Free e file state tax return 689, and Revenue Procedure 2012-20, 2012-14 I. Free e file state tax return R. Free e file state tax return B. Free e file state tax return 700, or any successor. Free e file state tax return Revenue Procedure 2011-14 is available at  www. Free e file state tax return irs. Free e file state tax return gov/irb/2011-04IRB/ar08. Free e file state tax return html. Free e file state tax return Income Taxes This section discusses federal, state, local, and foreign income taxes. Free e file state tax return Federal income taxes. Free e file state tax return   You cannot deduct federal income taxes. Free e file state tax return State and local income taxes. Free e file state tax return   A corporation or partnership can deduct state and local income taxes imposed on the corporation or partnership as business expenses. Free e file state tax return An individual can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). Free e file state tax return   However, an individual can deduct a state tax on gross income (as distinguished from net income) directly attributable to a trade or business as a business expense. Free e file state tax return Accrual of contested income taxes. Free e file state tax return   If you use an accrual method, and you contest a state or local income tax liability, you must accrue and deduct any contested amount in the tax year in which the liability is finally determined. Free e file state tax return   If additional state or local income taxes for a prior year are assessed in a later year, you can deduct the taxes in the year in which they were originally imposed (the prior year) if the tax liability is not contested. Free e file state tax return You cannot deduct them in the year in which the liability is finally determined. Free e file state tax return    The filing of an income tax return is not considered a contest and, in the absence of an overt act of protest, you can deduct the tax in the prior year. Free e file state tax return Also, you can deduct any additional taxes in the prior year if you do not show some affirmative evidence of denial of the liability. Free e file state tax return   However, if you consistently deduct additional assessments in the year they are paid or finally determined (including those for which there was no contest), you must continue to do so. Free e file state tax return You cannot take a deduction in the earlier year unless you receive permission to change your method of accounting. Free e file state tax return For more information on accounting methods, see When Can I Deduct an Expense in chapter 1. Free e file state tax return Foreign income taxes. Free e file state tax return   Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Free e file state tax return S. Free e file state tax return possession. Free e file state tax return However, an individual cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Free e file state tax return S. Free e file state tax return tax under the foreign earned income exclusion or the foreign housing exclusion. Free e file state tax return For information on these exclusions, see Publication 54, Tax Guide for U. Free e file state tax return S. Free e file state tax return Citizens and Resident Aliens Abroad. Free e file state tax return For information on the foreign tax credit, see Publication 514, Foreign Tax Credit for Individuals. Free e file state tax return Employment Taxes If you have employees, you must withhold various taxes from your employees' pay. Free e file state tax return Most employers must withhold their employees' share of social security, Medicare taxes, and Additional Medicare Tax (if applicable) along with state and federal income taxes. Free e file state tax return You may also need to pay certain employment taxes from your own funds. Free e file state tax return These include your share of social security and Medicare taxes as an employer, along with unemployment taxes. Free e file state tax return Note. Free e file state tax return Additional Medicare Tax is only imposed on the employee. Free e file state tax return There is no employer share of Additional Medicare Tax. Free e file state tax return Your deduction for wages paid is not reduced by the social security and Medicare taxes, Additional Medicare Tax, and income taxes you withhold from your employees. Free e file state tax return You can deduct the employment taxes you must pay from your own funds as taxes. Free e file state tax return Example. Free e file state tax return You pay your employee $18,000 a year. Free e file state tax return However, after you withhold various taxes, your employee receives $14,500. Free e file state tax return You also pay an additional $1,500 in employment taxes. Free e file state tax return You should deduct the full $18,000 as wages. Free e file state tax return You can deduct the $1,500 you pay from your own funds as taxes. Free e file state tax return For more information on employment taxes, see Publication 15 (Circular E). Free e file state tax return Unemployment fund taxes. Free e file state tax return   As an employer, you may have to make payments to a state unemployment compensation fund or to a state disability benefit fund. Free e file state tax return Deduct these payments as taxes. Free e file state tax return Other Taxes The following are other taxes you can deduct if you incur them in the ordinary course of your trade or business. Free e file state tax return Excise taxes. Free e file state tax return   Generally, you can deduct as a business expense all excise taxes that are ordinary and necessary expenses of carrying on your trade or business. Free e file state tax return However, see Fuel taxes , later. Free e file state tax return   For more information on excise taxes, see Publication 510. Free e file state tax return Franchise taxes. Free e file state tax return   You can deduct corporate franchise taxes as a business expense. Free e file state tax return Fuel taxes. Free e file state tax return   Generally, taxes on gasoline, diesel fuel, and other motor fuels that you use in your business are included as part of the cost of the fuel. Free e file state tax return Do not deduct these taxes as a separate item. Free e file state tax return   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. Free e file state tax return For more information, see Publication 510. Free e file state tax return Occupational taxes. Free e file state tax return   You can deduct as a business expense an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Free e file state tax return Personal property tax. Free e file state tax return   You can deduct any tax imposed by a state or local government on personal property used in your trade or business. Free e file state tax return Sales tax. Free e file state tax return   Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. Free e file state tax return If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. Free e file state tax return If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. Free e file state tax return If the property is depreciable, add the sales tax to the basis for depreciation. Free e file state tax return For more information on basis, see Publication 551. Free e file state tax return    Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. Free e file state tax return Also, do not include these taxes in gross receipts or sales. Free e file state tax return Self-employment tax. Free e file state tax return   You can deduct part of your self-employment tax as a business expense in figuring your adjusted gross income. Free e file state tax return This deduction only affects your income tax. Free e file state tax return It does not affect your net earnings from self-employment or your self-employment tax. Free e file state tax return   To deduct the tax, enter on Form 1040, line 27, the amount shown on the Deduction for one-half of self-employment tax line of Schedule SE (Form 1040). Free e file state tax return   For more information on self-employment tax, see Publication 334. Free e file state tax return Additional Medicare Tax. Free e file state tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax on self-employment income. Free e file state tax return See Form 8959 and the Instructions for Form 8959 for more information on the Additional Medicare Tax. Free e file state tax return Prev  Up  Next   Home   More Online Publications