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Free Federal And State Tax Filing

Free federal and state tax filing Publication 3402 - Introductory Material Table of Contents Reminder IntroductionOrdering forms and publications. Free federal and state tax filing Tax questions. Free federal and state tax filing Useful Items - You may want to see: Reminder Photographs of missing children. Free federal and state tax filing  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free federal and state tax filing Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free federal and state tax filing You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free federal and state tax filing Introduction This publication provides federal income, employment, and excise tax information for limited liability companies. Free federal and state tax filing This publication does not address state law governing the formation, operation, or termination of limited liability companies. Free federal and state tax filing This publication does not address any state taxes. Free federal and state tax filing Comments and suggestions. Free federal and state tax filing   We welcome your comments about this publication and your suggestions for future editions. Free federal and state tax filing   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Free federal and state tax filing NW, IR–6526 Washington, DC 20224   We respond to many letters by telephone. Free federal and state tax filing Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free federal and state tax filing   You can email us at *taxforms@irs. Free federal and state tax filing gov. Free federal and state tax filing (The asterisk must be included in the address. Free federal and state tax filing ) Please put “Publications Comment” on the subject line. Free federal and state tax filing Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products. Free federal and state tax filing Ordering forms and publications. Free federal and state tax filing   Visit www. Free federal and state tax filing irs. Free federal and state tax filing gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. Free federal and state tax filing Internal Revenue Service1201 N. Free federal and state tax filing Mitsubishi MotorwayBloomington, IL 61705-6613 Tax questions. Free federal and state tax filing   If you have a tax question, check the information available on www. Free federal and state tax filing irs. Free federal and state tax filing gov or call 1-800-829-1040. Free federal and state tax filing We cannot answer tax questions sent to either of the above addresses. Free federal and state tax filing Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 334 Tax Guide for Small Business 505 Tax Withholding and Estimated Tax 535 Business Expenses 541 Partnerships 542 Corporations 544 Sales and Other Dispositions of Assets 583 Starting a Business and Keeping Records 925 Passive Activity and At-Risk Rules Form (and Instructions) 1065 U. Free federal and state tax filing S. Free federal and state tax filing Return of Partnership Income 1120 U. Free federal and state tax filing S. Free federal and state tax filing Corporation Income Tax Return 1120S U. Free federal and state tax filing S. Free federal and state tax filing Income Tax Return for an S Corporation 2553 Election by a Small Business Corporation 8832 Entity Classification Election See How To Get More Information near the end of this publication for information about getting publications and forms. Free federal and state tax filing Prev  Up  Next   Home   More Online Publications
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Filing Information For Estate & Gift Taxes

Filing Estate and Gift Tax Returns
Where to File and Contact Information for Estate and Gift Tax

Gift Tax
The gift tax applies to the transfer by gift of any property.

Estate Tax
Estate tax may apply to your taxable estate at your death.

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General information on when these taxes apply and when they do not.

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The Free Federal And State Tax Filing

Free federal and state tax filing 3. Free federal and state tax filing   Rent Expense Table of Contents Introduction Topics - This chapter discusses: RentConditional sales contract. Free federal and state tax filing Leveraged leases. Free federal and state tax filing Leveraged leases of limited-use property. Free federal and state tax filing Taxes on Leased Property Cost of Getting a Lease Improvements by Lessee Capitalizing Rent Expenses Introduction This chapter discusses the tax treatment of rent or lease payments you make for property you use in your business but do not own. Free federal and state tax filing It also discusses how to treat other kinds of payments you make that are related to your use of this property. Free federal and state tax filing These include payments you make for taxes on the property. Free federal and state tax filing Topics - This chapter discusses: The definition of rent Taxes on leased property The cost of getting a lease Improvements by the lessee Capitalizing rent expenses Rent Rent is any amount you pay for the use of property you do not own. Free federal and state tax filing In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. Free federal and state tax filing If you have or will receive equity in or title to the property, the rent is not deductible. Free federal and state tax filing Unreasonable rent. Free federal and state tax filing   You cannot take a rental deduction for unreasonable rent. Free federal and state tax filing Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Free federal and state tax filing Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Free federal and state tax filing Rent is not unreasonable just because it is figured as a percentage of gross sales. Free federal and state tax filing For examples of related persons, see Related persons in chapter 2, Publication 544. Free federal and state tax filing Rent on your home. Free federal and state tax filing   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. Free federal and state tax filing You must meet the requirements for business use of your home. Free federal and state tax filing For more information, see Business use of your home in chapter 1. Free federal and state tax filing Rent paid in advance. Free federal and state tax filing   Generally, rent paid in your trade or business is deductible in the year paid or accrued. Free federal and state tax filing If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. Free federal and state tax filing You can deduct the rest of your payment only over the period to which it applies. Free federal and state tax filing Example 1. Free federal and state tax filing You are a calendar year taxpayer and you leased a building for 5 years beginning July 1. Free federal and state tax filing Your rent is $12,000 per year. Free federal and state tax filing You paid the first year's rent ($12,000) on June 30. Free federal and state tax filing You can deduct only $6,000 (6/12 × $12,000) for the rent that applies to the first year. Free federal and state tax filing Example 2. Free federal and state tax filing You are a calendar year taxpayer. Free federal and state tax filing Last January you leased property for 3 years for $6,000 a year. Free federal and state tax filing You paid the full $18,000 (3 × $6,000) during the first year of the lease. Free federal and state tax filing Each year you can deduct only $6,000, the part of the lease that applies to that year. Free federal and state tax filing Canceling a lease. Free federal and state tax filing   You generally can deduct as rent an amount you pay to cancel a business lease. Free federal and state tax filing Lease or purchase. Free federal and state tax filing   There may be instances in which you must determine whether your payments are for rent or for the purchase of the property. Free federal and state tax filing You must first determine whether your agreement is a lease or a conditional sales contract. Free federal and state tax filing Payments made under a conditional sales contract are not deductible as rent expense. Free federal and state tax filing Conditional sales contract. Free federal and state tax filing   Whether an agreement is a conditional sales contract depends on the intent of the parties. Free federal and state tax filing Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. Free federal and state tax filing No single test, or special combination of tests, always applies. Free federal and state tax filing However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. Free federal and state tax filing The agreement applies part of each payment toward an equity interest you will receive. Free federal and state tax filing You get title to the property after you make a stated amount of required payments. Free federal and state tax filing The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. Free federal and state tax filing You pay much more than the current fair rental value of the property. Free federal and state tax filing You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Free federal and state tax filing Determine this value when you make the agreement. Free federal and state tax filing You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. Free federal and state tax filing The agreement designates part of the payments as interest, or that part is easy to recognize as interest. Free federal and state tax filing Leveraged leases. Free federal and state tax filing   Leveraged lease transactions may not be considered leases. Free federal and state tax filing Leveraged leases generally involve three parties: a lessor, a lessee, and a lender to the lessor. Free federal and state tax filing Usually the lease term covers a large part of the useful life of the leased property, and the lessee's payments to the lessor are enough to cover the lessor's payments to the lender. Free federal and state tax filing   If you plan to take part in what appears to be a leveraged lease, you may want to get an advance ruling. Free federal and state tax filing Revenue Procedure 2001-28 on page 1156 of Internal Revenue Bulletin 2001-19 contains the guidelines the IRS will use to determine if a leveraged lease is a lease for federal income tax purposes. Free federal and state tax filing Revenue Procedure 2001-29 on page 1160 of the same Internal Revenue Bulletin provides the information required to be furnished in a request for an advance ruling on a leveraged lease transaction. Free federal and state tax filing Internal Revenue Bulletin 2001-19 is available at www. Free federal and state tax filing irs. Free federal and state tax filing gov/pub/irs-irbs/irb01-19. Free federal and state tax filing pdf. Free federal and state tax filing   In general, Revenue Procedure 2001-28 provides that, for advance ruling purposes only, the IRS will consider the lessor in a leveraged lease transaction to be the owner of the property and the transaction to be a valid lease if all the factors in the revenue procedure are met, including the following. Free federal and state tax filing The lessor must maintain a minimum unconditional “at risk” equity investment in the property (at least 20% of the cost of the property) during the entire lease term. Free federal and state tax filing The lessee may not have a contractual right to buy the property from the lessor at less than fair market value when the right is exercised. Free federal and state tax filing The lessee may not invest in the property, except as provided by Revenue Procedure 2001-28. Free federal and state tax filing The lessee may not lend any money to the lessor to buy the property or guarantee the loan used by the lessor to buy the property. Free federal and state tax filing The lessor must show that it expects to receive a profit apart from the tax deductions, allowances, credits, and other tax attributes. Free federal and state tax filing   The IRS may charge you a user fee for issuing a tax ruling. Free federal and state tax filing For more information, see Revenue Procedure 2014-1 available at  www. Free federal and state tax filing irs. Free federal and state tax filing gov/irb/2014-1_IRB/ar05. Free federal and state tax filing html. Free federal and state tax filing Leveraged leases of limited-use property. Free federal and state tax filing   The IRS will not issue advance rulings on leveraged leases of so-called limited-use property. Free federal and state tax filing Limited-use property is property not expected to be either useful to or usable by a lessor at the end of the lease term except for continued leasing or transfer to a lessee. Free federal and state tax filing See Revenue Procedure 2001-28 for examples of limited-use property and property that is not limited-use property. Free federal and state tax filing Leases over $250,000. Free federal and state tax filing   Special rules are provided for certain leases of tangible property. Free federal and state tax filing The rules apply if the lease calls for total payments of more than $250,000 and any of the following apply. Free federal and state tax filing Rents increase during the lease. Free federal and state tax filing Rents decrease during the lease. Free federal and state tax filing Rents are deferred (rent is payable after the end of the calendar year following the calendar year in which the use occurs and the rent is allocated). Free federal and state tax filing Rents are prepaid (rent is payable before the end of the calendar year preceding the calendar year in which the use occurs and the rent is allocated). Free federal and state tax filing These rules do not apply if your lease specifies equal amounts of rent for each month in the lease term and all rent payments are due in the calendar year to which the rent relates (or in the preceding or following calendar year). Free federal and state tax filing   Generally, if the special rules apply, you must use an accrual method of accounting (and time value of money principles) for your rental expenses, regardless of your overall method of accounting. Free federal and state tax filing In addition, in certain cases in which the IRS has determined that a lease was designed to achieve tax avoidance, you must take rent and stated or imputed interest into account under a constant rental accrual method in which the rent is treated as accruing ratably over the entire lease term. Free federal and state tax filing For details, see section 467 of the Internal Revenue Code. Free federal and state tax filing Taxes on Leased Property If you lease business property, you can deduct as additional rent any taxes you have to pay to or for the lessor. Free federal and state tax filing When you can deduct these taxes as additional rent depends on your accounting method. Free federal and state tax filing Cash method. Free federal and state tax filing   If you use the cash method of accounting, you can deduct the taxes as additional rent only for the tax year in which you pay them. Free federal and state tax filing Accrual method. Free federal and state tax filing   If you use an accrual method of accounting, you can deduct taxes as additional rent for the tax year in which you can determine all the following. Free federal and state tax filing That you have a liability for taxes on the leased property. Free federal and state tax filing How much the liability is. Free federal and state tax filing That economic performance occurred. Free federal and state tax filing   The liability and amount of taxes are determined by state or local law and the lease agreement. Free federal and state tax filing Economic performance occurs as you use the property. Free federal and state tax filing Example 1. Free federal and state tax filing Oak Corporation is a calendar year taxpayer that uses an accrual method of accounting. Free federal and state tax filing Oak leases land for use in its business. Free federal and state tax filing Under state law, owners of real property become liable (incur a lien on the property) for real estate taxes for the year on January 1 of that year. Free federal and state tax filing However, they do not have to pay these taxes until July 1 of the next year (18 months later) when tax bills are issued. Free federal and state tax filing Under the terms of the lease, Oak becomes liable for the real estate taxes in the later year when the tax bills are issued. Free federal and state tax filing If the lease ends before the tax bill for a year is issued, Oak is not liable for the taxes for that year. Free federal and state tax filing Oak cannot deduct the real estate taxes as rent until the tax bill is issued. Free federal and state tax filing This is when Oak's liability under the lease becomes fixed. Free federal and state tax filing Example 2. Free federal and state tax filing The facts are the same as in Example 1 except that, according to the terms of the lease, Oak becomes liable for the real estate taxes when the owner of the property becomes liable for them. Free federal and state tax filing As a result, Oak will deduct the real estate taxes as rent on its tax return for the earlier year. Free federal and state tax filing This is the year in which Oak's liability under the lease becomes fixed. Free federal and state tax filing Cost of Getting a Lease You may either enter into a new lease with the lessor of the property or get an existing lease from another lessee. Free federal and state tax filing Very often when you get an existing lease from another lessee, you must pay the previous lessee money to get the lease, besides having to pay the rent on the lease. Free federal and state tax filing If you get an existing lease on property or equipment for your business, you generally must amortize any amount you pay to get that lease over the remaining term of the lease. Free federal and state tax filing For example, if you pay $10,000 to get a lease and there are 10 years remaining on the lease with no option to renew, you can deduct $1,000 each year. Free federal and state tax filing The cost of getting an existing lease of tangible property is not subject to the amortization rules for section 197 intangibles discussed in chapter 8. Free federal and state tax filing Option to renew. Free federal and state tax filing   The term of the lease for amortization includes all renewal options plus any other period for which you and the lessor reasonably expect the lease to be renewed. Free federal and state tax filing However, this applies only if less than 75% of the cost of getting the lease is for the term remaining on the purchase date (not including any period for which you may choose to renew, extend, or continue the lease). Free federal and state tax filing Allocate the lease cost to the original term and any option term based on the facts and circumstances. Free federal and state tax filing In some cases, it may be appropriate to make the allocation using a present value computation. Free federal and state tax filing For more information, see Regulations section 1. Free federal and state tax filing 178-1(b)(5). Free federal and state tax filing Example 1. Free federal and state tax filing You paid $10,000 to get a lease with 20 years remaining on it and two options to renew for 5 years each. Free federal and state tax filing Of this cost, you paid $7,000 for the original lease and $3,000 for the renewal options. Free federal and state tax filing Because $7,000 is less than 75% of the total $10,000 cost of the lease (or $7,500), you must amortize the $10,000 over 30 years. Free federal and state tax filing That is the remaining life of your present lease plus the periods for renewal. Free federal and state tax filing Example 2. Free federal and state tax filing The facts are the same as in Example 1, except that you paid $8,000 for the original lease and $2,000 for the renewal options. Free federal and state tax filing You can amortize the entire $10,000 over the 20-year remaining life of the original lease. Free federal and state tax filing The $8,000 cost of getting the original lease was not less than 75% of the total cost of the lease (or $7,500). Free federal and state tax filing Cost of a modification agreement. Free federal and state tax filing   You may have to pay an additional “rent” amount over part of the lease period to change certain provisions in your lease. Free federal and state tax filing You must capitalize these payments and amortize them over the remaining period of the lease. Free federal and state tax filing You cannot deduct the payments as additional rent, even if they are described as rent in the agreement. Free federal and state tax filing Example. Free federal and state tax filing You are a calendar year taxpayer and sign a 20-year lease to rent part of a building starting on January 1. Free federal and state tax filing However, before you occupy it, you decide that you really need less space. Free federal and state tax filing The lessor agrees to reduce your rent from $7,000 to $6,000 per year and to release the excess space from the original lease. Free federal and state tax filing In exchange, you agree to pay an additional rent amount of $3,000, payable in 60 monthly installments of $50 each. Free federal and state tax filing   You must capitalize the $3,000 and amortize it over the 20-year term of the lease. Free federal and state tax filing Your amortization deduction each year will be $150 ($3,000 ÷ 20). Free federal and state tax filing You cannot deduct the $600 (12 × $50) that you will pay during each of the first 5 years as rent. Free federal and state tax filing Commissions, bonuses, and fees. Free federal and state tax filing   Commissions, bonuses, fees, and other amounts you pay to get a lease on property you use in your business are capital costs. Free federal and state tax filing You must amortize these costs over the term of the lease. Free federal and state tax filing Loss on merchandise and fixtures. Free federal and state tax filing   If you sell at a loss merchandise and fixtures that you bought solely to get a lease, the loss is a cost of getting the lease. Free federal and state tax filing You must capitalize the loss and amortize it over the remaining term of the lease. Free federal and state tax filing Improvements by Lessee If you add buildings or make other permanent improvements to leased property, depreciate the cost of the improvements using the modified accelerated cost recovery system (MACRS). Free federal and state tax filing Depreciate the property over its appropriate recovery period. Free federal and state tax filing You cannot amortize the cost over the remaining term of the lease. Free federal and state tax filing If you do not keep the improvements when you end the lease, figure your gain or loss based on your adjusted basis in the improvements at that time. Free federal and state tax filing For more information, see the discussion of MACRS in Publication 946, How To Depreciate Property. Free federal and state tax filing Assignment of a lease. Free federal and state tax filing   If a long-term lessee who makes permanent improvements to land later assigns all lease rights to you for money and you pay the rent required by the lease, the amount you pay for the assignment is a capital investment. Free federal and state tax filing If the rental value of the leased land increased since the lease began, part of your capital investment is for that increase in the rental value. Free federal and state tax filing The rest is for your investment in the permanent improvements. Free federal and state tax filing   The part that is for the increased rental value of the land is a cost of getting a lease, and you amortize it over the remaining term of the lease. Free federal and state tax filing You can depreciate the part that is for your investment in the improvements over the recovery period of the property as discussed earlier, without regard to the lease term. Free federal and state tax filing Capitalizing Rent Expenses Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Free federal and state tax filing Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Free federal and state tax filing You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Free federal and state tax filing Indirect costs include amounts incurred for renting or leasing equipment, facilities, or land. Free federal and state tax filing Uniform capitalization rules. Free federal and state tax filing   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Free federal and state tax filing Produce real property or tangible personal property. Free federal and state tax filing For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Free federal and state tax filing Acquire property for resale. Free federal and state tax filing However, these rules do not apply to the following property. Free federal and state tax filing Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. Free federal and state tax filing Property you produce if you meet either of the following conditions. Free federal and state tax filing Your indirect costs of producing the property are $200,000 or less. Free federal and state tax filing You use the cash method of accounting and do not account for inventories. Free federal and state tax filing Example 1. Free federal and state tax filing You rent construction equipment to build a storage facility. Free federal and state tax filing If you are subject to the uniform capitalization rules, you must capitalize as part of the cost of the building the rent you paid for the equipment. Free federal and state tax filing You recover your cost by claiming a deduction for depreciation on the building. Free federal and state tax filing Example 2. Free federal and state tax filing You rent space in a facility to conduct your business of manufacturing tools. Free federal and state tax filing If you are subject to the uniform capitalization rules, you must include the rent you paid to occupy the facility in the cost of the tools you produce. Free federal and state tax filing More information. Free federal and state tax filing   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. 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