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Free File Form 4868

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Free File Form 4868

Free file form 4868 5. Free file form 4868   How To Get Tax Help Table of Contents Low Income Taxpayer Clinics Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free file form 4868 Free help with your tax return. Free file form 4868   You can get free help preparing your return nationwide from IRS-certified volunteers. Free file form 4868 The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free file form 4868 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free file form 4868 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free file form 4868 In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free file form 4868 To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free file form 4868 gov, download the IRS2Go app, or call 1-800-906-9887. Free file form 4868   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free file form 4868 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free file form 4868 aarp. Free file form 4868 org/money/taxaide or call 1-888-227-7669. Free file form 4868 For more information on these programs, go to IRS. Free file form 4868 gov and enter “VITA” in the search box. Free file form 4868 Internet. Free file form 4868    IRS. Free file form 4868 gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free file form 4868 Download the free IRS2Go app from the iTunes app store or from Google Play. Free file form 4868 Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free file form 4868 Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free file form 4868 gov or download the IRS2Go app and select the Refund Status option. Free file form 4868 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free file form 4868 Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free file form 4868 You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free file form 4868 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free file form 4868 Use the Interactive Tax Assistant (ITA) to research your tax questions. Free file form 4868 No need to wait on the phone or stand in line. Free file form 4868 The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free file form 4868 When you reach the response screen, you can print the entire interview and the final response for your records. Free file form 4868 New subject areas are added on a regular basis. Free file form 4868  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free file form 4868 gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free file form 4868 You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Free file form 4868 The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Free file form 4868 When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Free file form 4868 Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Free file form 4868 You can also ask the IRS to mail a return or an account transcript to you. Free file form 4868 Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Free file form 4868 gov or by calling 1-800-908-9946. Free file form 4868 Tax return and tax account transcripts are generally available for the current year and the past three years. Free file form 4868 Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free file form 4868 Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free file form 4868 If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free file form 4868 Check the status of your amended return using Where's My Amended Return? Go to IRS. Free file form 4868 gov and enter Where's My Amended Return? in the search box. Free file form 4868 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free file form 4868 It can take up to 3 weeks from the date you mailed it to show up in our system. Free file form 4868 Make a payment using one of several safe and convenient electronic payment options available on IRS. Free file form 4868 gov. Free file form 4868 Select the Payment tab on the front page of IRS. Free file form 4868 gov for more information. Free file form 4868 Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Free file form 4868 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Free file form 4868 gov. Free file form 4868 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Free file form 4868 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free file form 4868 gov. Free file form 4868 Request an Electronic Filing PIN by going to IRS. Free file form 4868 gov and entering Electronic Filing PIN in the search box. Free file form 4868 Download forms, instructions and publications, including accessible versions for people with disabilities. Free file form 4868 Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free file form 4868 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free file form 4868 An employee can answer questions about your tax account or help you set up a payment plan. Free file form 4868 Before you visit, check the Office Locator on IRS. Free file form 4868 gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free file form 4868 If you have a special need, such as a disability, you can request an appointment. Free file form 4868 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free file form 4868 Apply for an Employer Identification Number (EIN). Free file form 4868 Go to IRS. Free file form 4868 gov and enter Apply for an EIN in the search box. Free file form 4868 Read the Internal Revenue Code, regulations, or other official guidance. Free file form 4868 Read Internal Revenue Bulletins. Free file form 4868 Sign up to receive local and national tax news and more by email. Free file form 4868 Just click on “subscriptions” above the search box on IRS. Free file form 4868 gov and choose from a variety of options. Free file form 4868    Phone. Free file form 4868 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free file form 4868 Download the free IRS2Go app from the iTunes app store or from Google Play. Free file form 4868 Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free file form 4868 gov, or download the IRS2Go app. Free file form 4868 Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free file form 4868 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free file form 4868 Most VITA and TCE sites offer free electronic filing. Free file form 4868 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free file form 4868 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free file form 4868 Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free file form 4868 If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free file form 4868 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free file form 4868 Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free file form 4868 Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free file form 4868 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free file form 4868 Note, the above information is for our automated hotline. Free file form 4868 Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free file form 4868 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free file form 4868 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free file form 4868 It can take up to 3 weeks from the date you mailed it to show up in our system. Free file form 4868 Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free file form 4868 You should receive your order within 10 business days. Free file form 4868 Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free file form 4868 If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free file form 4868 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free file form 4868 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free file form 4868 These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free file form 4868    Walk-in. Free file form 4868 You can find a selection of forms, publications and services — in-person. Free file form 4868 Products. Free file form 4868 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free file form 4868 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free file form 4868 Services. Free file form 4868 You can walk in to your local TAC for face-to-face tax help. Free file form 4868 An employee can answer questions about your tax account or help you set up a payment plan. Free file form 4868 Before visiting, use the Office Locator tool on IRS. Free file form 4868 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free file form 4868    Mail. Free file form 4868 You can send your order for forms, instructions, and publications to the address below. Free file form 4868 You should receive a response within 10 business days after your request is received. Free file form 4868 Internal Revenue Service 1201 N. Free file form 4868 Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free file form 4868 The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free file form 4868 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free file form 4868   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free file form 4868 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free file form 4868 You face (or your business is facing) an immediate threat of adverse action. Free file form 4868 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free file form 4868   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free file form 4868 Here's why we can help: TAS is an independent organization within the IRS. Free file form 4868 Our advocates know how to work with the IRS. Free file form 4868 Our services are free and tailored to meet your needs. Free file form 4868 We have offices in every state, the District of Columbia, and Puerto Rico. Free file form 4868   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Free file form 4868   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free file form 4868 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free file form 4868 Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Free file form 4868 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free file form 4868 Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free file form 4868 Prev  Up  Next   Home   More Online Publications
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Projections of Federal Tax Return Filings - IRS Office of Research

Return to Tax Stats home page.

Here you will find forecasts of the number of returns to be filed for tax forms within the individual, tax-exempt, and business areas. These statistical projections are developed by the IRS Office of Research.

Projections Publications

The following publications are available as an Adobe Acrobat PDF file. A free Adobe® reader is available for download, if needed. Also, the following tables are available as Microsoft Excel spreadsheets. A free Excel® reader is available for download, if needed.

Calendar Year Projections of Information and Withholding Documents for the United States and IRS Campuses (PDF)
Publication 6961 (Revised 12/12) by IRS; Research, Analysis, and Statistics; Office of Research
This IRS Publication contains multi-year projections of the number of information and withholding documents to be filed with the IRS. The publication includes detailed projections by approximately 30 information document types such as Form W-2, Form 1099INT, etc., by medium of filing (paper versus electronic) and by IRS processing campus location.
Fiscal Year Return Projections for the United States (PDF)
Publication 6292 (Revised 07/12) by IRS; Research, Analysis, and Statistics; Office of Research
IRS Publication 6292 contains multi-year projections of the number of tax returns to be filed with the IRS by fiscal year of filing. The publication includes detailed projections by approximately 50 different individual, business and tax-exempt return types such as Form 1040, Form 1120, Form 941 and Form 990. There is also additional detail by medium of filing (paper versus electronic) and by IRS business operating division categorizations.
Calendar Year Projections of Individual Returns by Major Processing Categories, Selected Years and Areas (PDF)
Publication 6187 (Revised 11/12) by IRS; Research, Analysis, and Statistics; Office of Research
IRS Publication 6187 contains multi-year projections of the number of individual Form 1040 series returns to be filed with the IRS by major processing categories important to IRS planning operations. This includes detail by form type (Forms 1040, 1040A, and 1040EZ), by medium of filing (paper versus electronic), and by other characteristics such as refund returns. Selected portions of the forecasts are also shown by IRS processing campus location, and by state.
Calendar Year Return Projections for the United States and IRS Campuses (PDF)
Publication 6186 (Revised 10/13) by IRS; Research, Analysis, and Statistics; Office of Research
IRS Publication 6186 contains multi-year projections of the number of tax returns to be filed with the IRS by the calendar year of filing. The publication includes detailed projections by approximately 50 different individual, business and tax-exempt return types such as Form 1040, Form 1120, Form 941 and Form 990. There is also additional detail by medium of filing (paper versus electronic) and by IRS processing campus location.
Calendar Year Return Projections by State (PDF)
Publication 6149 (Revised 12/12) by IRS; Research, Analysis, and Statistics; Office of Research.
IRS Publication 6149 contains multi-year projections of the number of tax returns to be filed with the IRS by state—as determined by the addresses on the tax returns. The publication includes detailed projections by approximately 50 different individual, business and tax-exempt return types such as Form 1040, Form 1120, Form 941 and Form 990. There is also additional detail by medium of filing (paper versus electronic).

Articles

Projections of Federal Tax Return Filings: Calendar Years 2009–2016
Winter Bulletin, 2010

A grand total of 238 million tax returns are projected to be filed with the IRS during Calendar Year (CY) 2010. This number represents a decrease of 1 percent from the estimated CY 2009 filings of 240.4 million returns.

Related
Statistical Table: 1
Projections of Federal Tax Return Filings: Calendar Years 2005–2012
SOI Bulletin, Winter 2005–2006
Taxpayers are expected to file a grand total of 229.3 million tax returns with the Internal Revenue Service (IRS) during Calendar Year (CY) 2006. That projected level reflects a modest increase of only 0.1 percent over the estimated CY 2005 filings of 229.0 million. Related
Statistical Table: 1

Historical Projections Table


Data Presented

Selected Returns and Forms Filed or To Be Filed by Type During Specified Calendar Years
Tax Years
1990–2007
Published as:
SOI Bulletin, Historical Table 22

 

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Page Last Reviewed or Updated: 15-Nov-2013

The Free File Form 4868

Free file form 4868 Other Methods of Depreciation Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: How To Figure the DeductionBasis Useful Life Salvage Value Methods To UseStraight Line Method Declining Balance Method Income Forecast Method How To Change Methods DispositionsSale or exchange. Free file form 4868 Property not disposed of or abandoned. Free file form 4868 Special rule for normal retirements from item accounts. Free file form 4868 Abandoned property. Free file form 4868 Single item accounts. Free file form 4868 Multiple property account. Free file form 4868 Topics - This chapter discusses: How to figure the deduction Methods to use How to change methods Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records 946 How To Depreciate Property Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization Schedule C (Form 1040) Profit or Loss From Business If your property is being depreciated under ACRS, you must continue to use rules for depreciation that applied when you placed the property in service. Free file form 4868 If your property qualified for MACRS, you must depreciate it under MACRS. Free file form 4868 See Publication 946. Free file form 4868 However, you cannot use MACRS for certain property because of special rules that exclude it from MACRS. Free file form 4868 Also, you can elect to exclude certain property from being depreciated under MACRS. Free file form 4868 Property that you cannot depreciate using MACRS includes: Intangible property, Property you can elect to exclude from MACRS that you properly depreciate under a method that is not based on a term of years, Certain public utility property, Any motion picture film or video tape, Any sound recording, and Certain real and personal property placed in service before 1987. Free file form 4868 Intangible property. Free file form 4868   You cannot depreciate intangible property under ACRS or MACRS. Free file form 4868 You depreciate intangible property using any other reasonable method, usually, the straight line method. Free file form 4868 Note. Free file form 4868 The cost of certain intangible property that you acquire after August 10, 1993, must be amortized over a 15-year period. Free file form 4868 For more information, see chapter 12 of Publication 535. Free file form 4868 Public utility property. Free file form 4868   The law excludes from MACRS any public utility property for which the taxpayer does not use a normalization method of accounting. Free file form 4868 This type of property is subject to depreciation under a special rule. Free file form 4868 Videocassettes. Free file form 4868   If you are in the videocassette rental business, you can depreciate those videocassettes purchased for rental. Free file form 4868 You can depreciate the cost less salvage value of those videocassettes that have a useful life over one year using either: The straight line method, or The income forecast method. Free file form 4868 The straight line method, salvage value, and useful life are discussed later under Methods To Use. Free file form 4868 You can deduct in the year of purchase as a business expense the cost of any cassette that has a useful life of one year or less. Free file form 4868 How To Figure the Deduction Two other reasonable methods can be used to figure your deduction for property not covered under ACRS or MACRS. Free file form 4868 These methods are straight line and declining balance. Free file form 4868 To figure depreciation using these methods, you must generally determine three things about the property you intend to depreciate. Free file form 4868 They are: The basis, The useful life, and The estimated salvage value at the end of its useful life. Free file form 4868 The amount of the deduction in any year also depends on which method of depreciation you choose. Free file form 4868 Basis To deduct the proper amount of depreciation each year, first determine your basis in the property you intend to depreciate. Free file form 4868 The basis used for figuring depreciation is the same as the basis that would be used for figuring the gain on a sale. Free file form 4868 Your original basis is usually the purchase price. Free file form 4868 However, if you acquire property in some other way, such as inheriting it, getting it as a gift, or building it yourself, you have to figure your original basis in a different way. Free file form 4868 Adjusted basis. Free file form 4868   Events will often change the basis of property. Free file form 4868 When this occurs, the changed basis is called the adjusted basis. Free file form 4868 Some events, such as improvements you make, increase basis. Free file form 4868 Events such as deducting casualty losses and depreciation decrease basis. Free file form 4868 If basis is adjusted, the depreciation deduction may also have to be changed, depending on the reason for the adjustment and the method of depreciation you are using. Free file form 4868   Publication 551 explains how to figure basis for property acquired in different ways. Free file form 4868 It also discusses what items increase and decrease basis, how to figure adjusted basis, and how to allocate cost if you buy several pieces of property at one time. Free file form 4868 Useful Life The useful life of a piece of property is an estimate of how long you can expect to use it in your trade or business, or to produce income. Free file form 4868 It is the length of time over which you will make yearly depreciation deductions of your basis in the property. Free file form 4868 It is how long it will continue to be useful to you, not how long the property will last. Free file form 4868 Many things affect the useful life of property, such as: Frequency of use, Age when acquired, Your repair policy, and Environmental conditions. Free file form 4868 The useful life can also be affected by technological improvements, progress in the arts, reasonably foreseeable economic changes, shifting of business centers, prohibitory laws, and other causes. Free file form 4868 Consider all these factors before you arrive at a useful life for your property. Free file form 4868 The useful life of the same type of property varies from user to user. Free file form 4868 When you determine the useful life of your property, keep in mind your own experience with similar property. Free file form 4868 You can use the general experience of the industry you are in until you are able to determine a useful life of your property from your own experience. Free file form 4868 Change in useful life. Free file form 4868   You base your estimate of useful life on certain facts. Free file form 4868 If these facts change significantly, you can adjust your estimate of the remaining useful life. Free file form 4868 However, you redetermine the estimated useful life only when the change is substantial and there is a clear reason for making the change. Free file form 4868 Salvage Value It is important for you to accurately determine the correct salvage value of the property you want to depreciate. Free file form 4868 You generally cannot depreciate property below a reasonable salvage value. Free file form 4868 Determining salvage value. Free file form 4868   Salvage value is the estimated value of property at the end of its useful life. Free file form 4868 It is what you expect to get for the property if you sell it after you can no longer use it productively. Free file form 4868 You must estimate the salvage value of a piece of property when you first acquire it. Free file form 4868   Salvage value is affected both by how you use the property and how long you use it. Free file form 4868 If it is your policy to dispose of property that is still in good operating condition, the salvage value can be relatively large. Free file form 4868 However, if your policy is to use property until it is no longer usable, its salvage value can be its junk value. Free file form 4868 Changing salvage value. Free file form 4868   Once you determine the salvage value for property, you should not change it merely because prices have changed. Free file form 4868 However, if you redetermine the useful life of property, as discussed earlier under Change in useful life, you can also redetermine the salvage value. Free file form 4868 When you redetermine the salvage value, take into account the facts that exist at the time. Free file form 4868 Net salvage. Free file form 4868   Net salvage is the salvage value of property minus what it costs to remove it when you dispose of it. Free file form 4868 You can choose either salvage value or net salvage when you figure depreciation. Free file form 4868 You must consistently use the one you choose and the treatment of the costs of removal must be consistent with the practice adopted. Free file form 4868 However, if the cost to remove the property is more than the estimated salvage value, then net salvage is zero. Free file form 4868 Your salvage value can never be less than zero. Free file form 4868 Ten percent rule. Free file form 4868   If you acquire personal property that has a useful life of 3 years or more, you can use an amount for salvage value that is less than your actual estimate. Free file form 4868 You can subtract from your estimate of salvage value an amount equal to 10% of your basis in the property. Free file form 4868 If salvage value is less than 10% of basis, you can ignore salvage value when you figure depreciation. Free file form 4868 Methods To Use Two methods of depreciation are the straight line and declining balance methods. Free file form 4868 If ACRS or MACRS does not apply, you can use one of these methods. Free file form 4868 The straight line and declining balance methods discussed in this section are not figured in the same way as straight line or declining balance methods under MACRS. Free file form 4868 Straight Line Method Before 1981, you could use any reasonable method for every kind of depreciable property. Free file form 4868 One of these methods was the straight line method. Free file form 4868 This method was also used for intangible property. Free file form 4868 It lets you deduct the same amount of depreciation each year. Free file form 4868 To figure your deduction, determine the adjusted basis of your property, its salvage value, and its estimated useful life. Free file form 4868 Subtract the salvage value, if any, from the adjusted basis. Free file form 4868 The balance is the total amount of depreciation you can take over the useful life of the property. Free file form 4868 Divide the balance by the number of years remaining in the useful life. Free file form 4868 This gives you the amount of your yearly depreciation deduction. Free file form 4868 Unless there is a big change in adjusted basis, or useful life, this amount will stay the same throughout the time you depreciate the property. Free file form 4868 If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. Free file form 4868 Example. Free file form 4868 In April 1994, Frank bought a franchise for $5,600. Free file form 4868 It expires in 10 years. Free file form 4868 This property is intangible property that cannot be depreciated under MACRS. Free file form 4868 Frank depreciates the franchise under the straight line method, using a 10-year useful life and no salvage value. Free file form 4868 He takes the $5,600 basis and divides that amount by 10 years ($5,600 ÷ 10 = $560, a full year's use). Free file form 4868 He must prorate the $560 for his 9 months of use in 1994. Free file form 4868 This gives him a deduction of $420 ($560 ÷ 9/12). Free file form 4868 In 1995, Frank can deduct $560 for the full year. Free file form 4868 Declining Balance Method The declining balance method allows you to recover a larger amount of the cost of the property in the early years of your use of the property. Free file form 4868 The rate cannot be more than twice the straight line rate. Free file form 4868 Rate of depreciation. Free file form 4868   Under this method, you must determine your declining balance rate of depreciation. Free file form 4868 The initial step is to: Divide the number 1 by the useful life of your property to get a straight line rate. Free file form 4868 (For example, if property has a useful life of 5 years, its normal straight line rate of depreciation is ⅕, or 20%. Free file form 4868 ) Multiply this straight line rate by a number that is more than 1 but not more than 2 to determine the declining balance rate. Free file form 4868 Unless there is a change in the useful life during the time you depreciate the property, the rate of depreciation generally will not change. Free file form 4868 Depreciation deductions. Free file form 4868   After you determine the rate of depreciation, multiply the adjusted basis of the property by it. Free file form 4868 This gives you the amount of your deduction. Free file form 4868 For example, if your adjusted basis at the beginning of the first year is $10,000, and your declining balance rate is 20%, your depreciation deduction for the first year is $2,000 ($10,000 ÷ 20%). Free file form 4868 To figure your depreciation deduction in the second year, you must first adjust the basis for the amount of depreciation you deducted in the first year. Free file form 4868 Subtract the previous year's depreciation from your basis ($10,000 - $2,000 = $8,000). Free file form 4868 Multiply this amount by the rate of depreciation ($8,000 ÷ 20% = $1,600). Free file form 4868 Your depreciation deduction for the second year is $1,600. Free file form 4868   As you can see from this example, your adjusted basis in the property gets smaller each year. Free file form 4868 Also, under this method, deductions are larger in the earlier years and smaller in the later years. Free file form 4868 You can make a change to the straight line method without consent. Free file form 4868 Salvage value. Free file form 4868   Do not subtract salvage value when you figure your yearly depreciation deductions under the declining balance method. Free file form 4868 However, you cannot depreciate the property below its reasonable salvage value. Free file form 4868 Determine salvage value using the rules discussed earlier, including the special 10% rule. Free file form 4868 Example. Free file form 4868 If your adjusted basis has been decreased to $1,000 and the rate of depreciation is 20%, your depreciation deduction should be $200. Free file form 4868 But if your estimate of salvage value was $900, you can only deduct $100. Free file form 4868 This is because $100 is the amount that would lower your adjusted basis to equal salvage value. Free file form 4868 Income Forecast Method The income forecast method requires income projections for each videocassette or group of videocassettes. Free file form 4868 You can group the videocassettes by title for making this projection. Free file form 4868 You determine the depreciation by applying a fraction to the cost less salvage value of the cassette. Free file form 4868 The numerator is the income from the videocassette for the tax year and the denominator is the total projected income for the cassette. Free file form 4868 For more information on the income forecast method, see Revenue Ruling 60-358 in Cumulative Bulletin 1960, Volume 2, on page 68. Free file form 4868 How To Change Methods In some cases, you may change your method of depreciation for property depreciated under a reasonable method. Free file form 4868 If you change your method of depreciation, it is generally a change in your method of accounting. Free file form 4868 You must get IRS consent before making the change. Free file form 4868 However, you do not need permission for certain changes in your method of depreciation. Free file form 4868 The rules discussed in this section do not apply to property depreciated under ACRS or MACRS. Free file form 4868 For information on ACRS elections,see Revocation of election, in chapter 1 under Alternate ACRS Method. Free file form 4868 Change to the straight line method. Free file form 4868   You can change from the declining balance method to the straight line method at any time during the useful life of your property without IRS consent. Free file form 4868 However, if you have a written agreement with the IRS that prohibits a change, you must first get IRS permission. Free file form 4868 When the change is made, figure depreciation based on your adjusted basis in the property at that time. Free file form 4868 Your adjusted basis takes into account all previous depreciation deductions. Free file form 4868 Use the estimated remaining useful life of your property at the time of change and its estimated salvage value. Free file form 4868   You can change from the declining balance method to straight line only on the original tax return for the year you first use the straight line method. Free file form 4868 You cannot make the change on an amended return filed after the due date of the original return (including extensions). Free file form 4868   When you make the change, attach a statement to your tax return showing: When you acquired the property, Its original cost or other original basis, The total amount claimed for depreciation and other allowances since you acquired it, Its salvage value and remaining useful life, and A description of the property and its use. Free file form 4868   After you change to straight line, you cannot change back to the declining balance method or to any other method for a period of 10 years without written permission from the IRS. Free file form 4868 Changes that require permission. Free file form 4868   For most other changes in method of depreciation, you must get permission from the IRS. Free file form 4868 To request a change in method of depreciation, file Form 3115. Free file form 4868 File the application within the first 180 days of the tax year the change is to become effective. Free file form 4868 In most cases, there is a user fee that must accompany Form 3115. Free file form 4868 See the instructions for Form 3115 to determine if a fee is required. Free file form 4868 Changes granted automatically. Free file form 4868   The IRS automatically approves certain changes of a method of depreciation. Free file form 4868 But, you must file Form 3115 for these automatic changes. Free file form 4868   However, IRS can deny permission if Form 3115 is not filed on time. Free file form 4868 For more information on automatic changes, see Revenue Procedure 74-11, 1974-1 C. Free file form 4868 B. Free file form 4868 420. Free file form 4868 Changes for which approval is not automatic. Free file form 4868   The automatic change procedures do not apply to: Property or an account where you made a change in depreciation within the last 10 tax years (unless the change was made under the Class Life System), Class Life Asset Depreciation Range System, and Public utility property. Free file form 4868   You must request and receive permission for these changes. Free file form 4868 To make the request, file Form 3115 during the first 180 days of the tax year for which you want the change to be effective. Free file form 4868 Change from an improper method. Free file form 4868   If the IRS disallows the method you are using, you do not need permission to change to a proper method. Free file form 4868 You can adopt the straight line method, or any other method that would have been permitted if you had used it from the beginning. Free file form 4868 If you file your tax return using an improper method, but later file an amended return, you can use a proper method on the amended return without getting IRS permission. Free file form 4868 However, you must file the amended return before the filing date for the next tax year. Free file form 4868 Dispositions Retirement is the permanent withdrawal of depreciable property from use in your trade or business or for the production of income. Free file form 4868 You can do this by selling, exchanging, or abandoning the item of property. Free file form 4868 You can also withdraw it from use without disposing of it. Free file form 4868 For example, you could place it in a supplies or scrap account. Free file form 4868 Retirements can be either normal or abnormal depending on all facts and circumstances. Free file form 4868 The rules discussed next do not apply to MACRS and ACRS property. Free file form 4868 Normal retirement. Free file form 4868   A normal retirement is a permanent withdrawal of depreciable property from use if the following apply: The retirement is made within the useful life you estimated originally, and The property has reached a condition at which you customarily retire or would retire similar property from use. Free file form 4868 A retirement is generally considered normal unless you can show that you retired the property because of a reason you did not consider when you originally estimated the useful life of the property. Free file form 4868 Abnormal retirement. Free file form 4868   A retirement can be abnormal if you withdraw the property early or under other circumstances. Free file form 4868 For example, if the property is damaged by a fire or suddenly becomes obsolete and is now useless. Free file form 4868 Gain or loss on retirement. Free file form 4868   There are special rules for figuring the gain or loss on retirement of property. Free file form 4868 The gain or loss will depend on several factors. Free file form 4868 These include the type of withdrawal, if the withdrawal was from a single property or multiple property account, and if the retirement was normal or abnormal. Free file form 4868 A single property account contains only one item of property. Free file form 4868 A multiple property account is one in which several items have been combined with a single rate of depreciation assigned to the entire account. Free file form 4868 Sale or exchange. Free file form 4868   If property is retired by sale or exchange, you figure gain or loss by the usual rules that apply to sales or other dispositions of property. Free file form 4868 See Publication 544. Free file form 4868 Property not disposed of or abandoned. Free file form 4868   If property is retired permanently, but not disposed of or physically abandoned, you do not recognize gain. Free file form 4868 You are allowed a loss in such a case, but only if the retirement is: An abnormal retirement, A normal retirement from a single property account in which you determined the life of each item of property separately, or A normal retirement from a multiple property account in which the depreciation rate is based on the maximum expected life of the longest lived item of property and the loss occurs before the expiration of the full useful life. Free file form 4868 However, you are not allowed a loss if the depreciation rate is based on the average useful life of the items of property in the account. Free file form 4868   To figure your loss, subtract the estimated salvage or fair market value of the property at the date of retirement, whichever is more, from its adjusted basis. Free file form 4868 Special rule for normal retirements from item accounts. Free file form 4868   You can generally deduct losses upon retirement of a few depreciable items of property with similar useful lives, if: You account for each one in a separate account, and You use the average useful life to figure depreciation. Free file form 4868 However, you cannot deduct losses if you use the average useful life to figure depreciation and they have a wide range of useful lives. Free file form 4868   If you have a large number of depreciable property items and use average useful lives to figure depreciation, you cannot deduct the losses upon normal retirements from these accounts. Free file form 4868 Abandoned property. Free file form 4868   If you physically abandon property, you can deduct as a loss the adjusted basis of the property at the time of its abandonment. Free file form 4868 However, your intent must be to discard the property so that you will not use it again or retrieve it for sale, exchange, or other disposition. Free file form 4868 Basis of property retired. Free file form 4868   The basis for figuring gain or loss on the retirement of property is its adjusted basis at the time of retirement, as determined in the following discussions. Free file form 4868 Single item accounts. Free file form 4868   If an item of property is accounted for in a single item account, the adjusted basis is the basis you would use to figure gain or loss for a sale or exchange of the property. Free file form 4868 This is generally the cost or other basis of the item of property less depreciation. Free file form 4868 See Publication 551. Free file form 4868 Multiple property account. Free file form 4868   For a normal retirement from a multiple property account, if you figured depreciation using the average expected useful life, the adjusted basis is the salvage value estimated for the item of property when it was originally acquired. Free file form 4868 If you figured depreciation using the maximum expected useful life of the longest lived item of property in the account, you must use the depreciation method used for the multiple property account and a rate based on the maximum expected useful life of the item of property retired. Free file form 4868   You make the adjustment for depreciation for an abnormal retirement from a multiple property account at the rate that would be proper if the item of property was depreciated in a single property account. Free file form 4868 The method of depreciation used for the multiple property account is used. Free file form 4868 You base the rate on either the average expected useful life or the maximum expected useful life of the retired item of property, depending on the method used to determine the depreciation rate for the multiple property account. Free file form 4868 Prev  Up  Next   Home   More Online Publications