Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Free Tax Filing For Students

Have Not Filed 2011 TaxesFree 2007 Taxes OnlineAmend Tax Return Already FiledFree HrblockFree 1040ezFreetaxusa 20112011 1040 Ez Form1040x 2011Penalties For Late Tax ReturnsE File 2012 Taxes LateH&r Block Income Tax1040ez Tax BookletNeed 2009 Tax ReturnWhere To File State TaxesFiling State TaxE File State Taxes Only2013 Federal 1040ez FormFile My Federal And State Taxes For FreeFile Taxes Last YearDownload A 1040ez Federal Tax FormFree Tax Filing For Low IncomeOnline 1040xFree Efile 1040ezIrs 1040ez Online FileFile 2009 Taxes OnlineFiling 2010 Taxes Late OnlineForm 1040nrFree Online 1040ezIrs Form 1040ez2011 Free Tax SoftwareFile Federal And State Tax For FreeAmended Federal Tax ReturnHow Do You File A Tax AmendmentHow To File An Amended Tax Return For 2012Free 2011 Tax Forms2009 Amended Tax ReturnFree 1040x SoftwareFile Taxes FreeWhere Can I File 2012 TaxesHow To Amend A 2012 Tax Return

Free Tax Filing For Students

Free tax filing for students 1. Free tax filing for students   Deducting Business Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: What Can I Deduct?Cost of Goods Sold Capital Expenses Capital versus Deductible Expenses Personal versus Business Expenses How Much Can I Deduct?Not-for-profit limits. Free tax filing for students At-risk limits. Free tax filing for students Passive activities. Free tax filing for students Net operating loss. Free tax filing for students When Can I Deduct an Expense?Economic performance. Free tax filing for students Not-for-Profit ActivitiesGross Income Limit on Deductions What's New Optional safe harbor method to determine the business use of a home deduction. Free tax filing for students  Beginning in 2013, you can use the optional safe harbor method to determine the deduction for the business use of your home. Free tax filing for students See Optional safe harbor method under Business use of your home , later. Free tax filing for students Introduction This chapter covers the general rules for deducting business expenses. Free tax filing for students Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. Free tax filing for students Topics - This chapter discusses: What you can deduct How much you can deduct When you can deduct Not-for-profit activities Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 538 Accounting Periods and Methods 542 Corporations 547 Casualties, Disasters, and Thefts 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction 946 How To Depreciate Property Form (and Instructions) Sch A (Form 1040) Itemized Deductions 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit See chapter 12 for information about getting publications and forms. Free tax filing for students What Can I Deduct? To be deductible, a business expense must be both ordinary and necessary. Free tax filing for students An ordinary expense is one that is common and accepted in your industry. Free tax filing for students A necessary expense is one that is helpful and appropriate for your trade or business. Free tax filing for students An expense does not have to be indispensable to be considered necessary. Free tax filing for students Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. Free tax filing for students In some cases you may not be allowed to deduct the expense at all. Free tax filing for students Therefore, it is important to distinguish usual business expenses from expenses that include the following. Free tax filing for students The expenses used to figure cost of goods sold, Capital expenses, and Personal expenses. Free tax filing for students Cost of Goods Sold If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Free tax filing for students Some of your business expenses may be included in figuring cost of goods sold. Free tax filing for students Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. Free tax filing for students If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense. Free tax filing for students The following are types of expenses that go into figuring cost of goods sold. Free tax filing for students The cost of products or raw materials, including freight. Free tax filing for students Storage. Free tax filing for students Direct labor (including contributions to pension or annuity plans) for workers who produce the products. Free tax filing for students Factory overhead. Free tax filing for students Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Free tax filing for students Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs. Free tax filing for students This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million. Free tax filing for students For more information, see the following sources. Free tax filing for students Cost of goods sold—chapter 6 of Publication 334. Free tax filing for students Inventories—Publication 538. Free tax filing for students Uniform capitalization rules—Publication 538 and section 263A of the Internal Revenue Code and the related regulations. Free tax filing for students Capital Expenses You must capitalize, rather than deduct, some costs. Free tax filing for students These costs are a part of your investment in your business and are called “capital expenses. Free tax filing for students ” Capital expenses are considered assets in your business. Free tax filing for students In general, you capitalize three types of costs. Free tax filing for students Business start-up costs (See Tip below). Free tax filing for students Business assets. Free tax filing for students Improvements. Free tax filing for students You can elect to deduct or amortize certain business start-up costs. Free tax filing for students See chapters 7 and 8. Free tax filing for students Cost recovery. Free tax filing for students   Although you generally cannot take a current deduction for a capital expense, you may be able to recover the amount you spend through depreciation, amortization, or depletion. Free tax filing for students These recovery methods allow you to deduct part of your cost each year. Free tax filing for students In this way, you are able to recover your capital expense. Free tax filing for students See Amortization (chapter 8) and Depletion (chapter 9) in this publication. Free tax filing for students A taxpayer can elect to deduct a portion of the costs of certain depreciable property as a section 179 deduction. Free tax filing for students A greater portion of these costs can be deducted if the property is qualified disaster assistance property. Free tax filing for students See Publication 946 for details. Free tax filing for students Going Into Business The costs of getting started in business, before you actually begin business operations, are capital expenses. Free tax filing for students These costs may include expenses for advertising, travel, or wages for training employees. Free tax filing for students If you go into business. Free tax filing for students   When you go into business, treat all costs you had to get your business started as capital expenses. Free tax filing for students   Usually you recover costs for a particular asset through depreciation. Free tax filing for students Generally, you cannot recover other costs until you sell the business or otherwise go out of business. Free tax filing for students However, you can choose to amortize certain costs for setting up your business. Free tax filing for students See Starting a Business in chapter 8 for more information on business start-up costs. Free tax filing for students If your attempt to go into business is unsuccessful. Free tax filing for students   If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories. Free tax filing for students The costs you had before making a decision to acquire or begin a specific business. Free tax filing for students These costs are personal and nondeductible. Free tax filing for students They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibility. Free tax filing for students The costs you had in your attempt to acquire or begin a specific business. Free tax filing for students These costs are capital expenses and you can deduct them as a capital loss. Free tax filing for students   If you are a corporation and your attempt to go into a new trade or business is not successful, you may be able to deduct all investigatory costs as a loss. Free tax filing for students   The costs of any assets acquired during your unsuccessful attempt to go into business are a part of your basis in the assets. Free tax filing for students You cannot take a deduction for these costs. Free tax filing for students You will recover the costs of these assets when you dispose of them. Free tax filing for students Business Assets There are many different kinds of business assets; for example, land, buildings, machinery, furniture, trucks, patents, and franchise rights. Free tax filing for students You must fully capitalize the cost of these assets, including freight and installation charges. Free tax filing for students Certain property you produce for use in your trade or business must be capitalized under the uniform capitalization rules. Free tax filing for students See Regulations section 1. Free tax filing for students 263A-2 for information on these rules. Free tax filing for students Improvements Improvements are generally major expenditures. Free tax filing for students Some examples are: new electric wiring, a new roof, a new floor, new plumbing, bricking up windows to strengthen a wall, and lighting improvements. Free tax filing for students The costs of making improvements to a business asset are capital expenses if the improvements add to the value of the asset, appreciably lengthen the time you can use it, or adapt it to a different use. Free tax filing for students Beginning in 2014, you must capitalize as improvements costs that are for the betterment of a unit of property, restore the unit of property, or adapt the unit of property to a new or different use. Free tax filing for students Temporary regulations allow you to capitalize costs meeting the above criteria for tax years beginning after 2011. Free tax filing for students However, you can currently deduct repairs that keep your property in a normal efficient operating condition as a business expense. Free tax filing for students Treat as repairs amounts paid to replace parts of a machine that only keep it in a normal operating condition. Free tax filing for students Restoration plan. Free tax filing for students   Capitalize the cost of reconditioning, improving, or altering your property as part of a general restoration plan to make it suitable for your business. Free tax filing for students This applies even if some of the work would by itself be classified as repairs. Free tax filing for students Capital versus Deductible Expenses To help you distinguish between capital and deductible expenses, different examples are given below. Free tax filing for students Motor vehicles. Free tax filing for students   You usually capitalize the cost of a motor vehicle you use in your business. Free tax filing for students You can recover its cost through annual deductions for depreciation. Free tax filing for students   There are dollar limits on the depreciation you can claim each year on passenger automobiles used in your business. Free tax filing for students See Publication 463. Free tax filing for students   Generally, repairs you make to your business vehicle are currently deductible. Free tax filing for students However, amounts you pay to recondition and overhaul a business vehicle are capital expenses and are recovered through depreciation. Free tax filing for students Roads and driveways. Free tax filing for students    The cost of building a private road on your business property and the cost of replacing a gravel driveway with a concrete one are capital expenses you may be able to depreciate. Free tax filing for students The cost of maintaining a private road on your business property is a deductible expense. Free tax filing for students Tools. Free tax filing for students   Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or their cost is minor. Free tax filing for students Machinery parts. Free tax filing for students   Unless the uniform capitalization rules apply, the cost of replacing short-lived parts of a machine to keep it in good working condition, but not add to its life, is a deductible expense. Free tax filing for students Heating equipment. Free tax filing for students   The cost of changing from one heating system to another is a capital expense. Free tax filing for students Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. Free tax filing for students However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. Free tax filing for students You can deduct the business part. Free tax filing for students For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you generally can deduct 70% of the interest as a business expense. Free tax filing for students The remaining 30% is personal interest and generally is not deductible. Free tax filing for students See chapter 4 for information on deducting interest and the allocation rules. Free tax filing for students Business use of your home. Free tax filing for students   If you use part of your home for business, you may be able to deduct expenses for the business use of your home. Free tax filing for students These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Free tax filing for students   To qualify to claim expenses for the business use of your home, you must meet both of the following tests. Free tax filing for students The business part of your home must be used exclusively and regularly for your trade or business. Free tax filing for students The business part of your home must be: Your principal place of business, or A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) used in connection with your trade or business. Free tax filing for students   You generally do not have to meet the exclusive use test for the part of your home that you regularly use either for the storage of inventory or product samples, or as a daycare facility. Free tax filing for students   Your home office qualifies as your principal place of business if you meet the following requirements. Free tax filing for students You use the office exclusively and regularly for administrative or management activities of your trade or business. Free tax filing for students You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Free tax filing for students   If you have more than one business location, determine your principal place of business based on the following factors. Free tax filing for students The relative importance of the activities performed at each location. Free tax filing for students If the relative importance factor does not determine your principal place of business, consider the time spent at each location. Free tax filing for students Optional safe harbor method. Free tax filing for students   Beginning in 2013, individual taxpayers can use the optional safe harbor method to determine the amount of deductible expenses attributable to certain business use of a residence during the tax year. Free tax filing for students This method is an alternative to the calculation, allocation, and substantiation of actual expenses. Free tax filing for students   The deduction under the optional method is limited to $1,500 per year based on $5 a square foot for up to 300 square feet. Free tax filing for students Under this method, you claim your allowable mortgage interest, real estate taxes, and casualty losses on the home as itemized deductions on Schedule A (Form 1040). Free tax filing for students You are not required to allocate these deductions between personal and business use, as is required under the regular method. Free tax filing for students If you use the optional method, you cannot depreciate the portion of your home used in a trade or business. Free tax filing for students   Business expenses unrelated to the home, such as advertising, supplies, and wages paid to employees, are still fully deductible. Free tax filing for students All of the requirements discussed earlier under Business use of your home still apply. Free tax filing for students   For more information on the deduction for business use of your home, including the optional safe harbor method, see Publication 587. Free tax filing for students    If you were entitled to deduct depreciation on the part of your home used for business, you cannot exclude the part of the gain from the sale of your home that equals any depreciation you deducted (or could have deducted) for periods after May 6, 1997. Free tax filing for students Business use of your car. Free tax filing for students   If you use your car exclusively in your business, you can deduct car expenses. Free tax filing for students If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Free tax filing for students Generally, commuting expenses between your home and your business location, within the area of your tax home, are not deductible. Free tax filing for students   You can deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. Free tax filing for students Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. Free tax filing for students Beginning in 2013, the standard mileage rate is 56. Free tax filing for students 5 cents per mile. Free tax filing for students   If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate. Free tax filing for students   For more information on car expenses and the rules for using the standard mileage rate, see Publication 463. Free tax filing for students How Much Can I Deduct? Generally, you can deduct the full amount of a business expense if it meets the criteria of ordinary and necessary and it is not a capital expense. Free tax filing for students Recovery of amount deducted (tax benefit rule). Free tax filing for students   If you recover part of an expense in the same tax year in which you would have claimed a deduction, reduce your current year expense by the amount of the recovery. Free tax filing for students If you have a recovery in a later year, include the recovered amount in income in that year. Free tax filing for students However, if part of the deduction for the expense did not reduce your tax, you do not have to include that part of the recovered amount in income. Free tax filing for students   For more information on recoveries and the tax benefit rule, see Publication 525. Free tax filing for students Payments in kind. Free tax filing for students   If you provide services to pay a business expense, the amount you can deduct is limited to your out-of-pocket costs. Free tax filing for students You cannot deduct the cost of your own labor. Free tax filing for students   Similarly, if you pay a business expense in goods or other property, you can deduct only what the property costs you. Free tax filing for students If these costs are included in the cost of goods sold, do not deduct them again as a business expense. Free tax filing for students Limits on losses. Free tax filing for students   If your deductions for an investment or business activity are more than the income it brings in, you have a loss. Free tax filing for students There may be limits on how much of the loss you can deduct. Free tax filing for students Not-for-profit limits. Free tax filing for students   If you carry on your business activity without the intention of making a profit, you cannot use a loss from it to offset other income. Free tax filing for students See Not-for-Profit Activities , later. Free tax filing for students At-risk limits. Free tax filing for students   Generally, a deductible loss from a trade or business or other income-producing activity is limited to the investment you have “at risk” in the activity. Free tax filing for students You are at risk in any activity for the following. Free tax filing for students The money and adjusted basis of property you contribute to the activity. Free tax filing for students Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. Free tax filing for students For more information, see Publication 925. Free tax filing for students Passive activities. Free tax filing for students   Generally, you are in a passive activity if you have a trade or business activity in which you do not materially participate, or a rental activity. Free tax filing for students In general, deductions for losses from passive activities only offset income from passive activities. Free tax filing for students You cannot use any excess deductions to offset other income. Free tax filing for students In addition, passive activity credits can only offset the tax on net passive income. Free tax filing for students Any excess loss or credits are carried over to later years. Free tax filing for students Suspended passive losses are fully deductible in the year you completely dispose of the activity. Free tax filing for students For more information, see Publication 925. Free tax filing for students Net operating loss. Free tax filing for students   If your deductions are more than your income for the year, you may have a “net operating loss. Free tax filing for students ” You can use a net operating loss to lower your taxes in other years. Free tax filing for students See Publication 536 for more information. Free tax filing for students   See Publication 542 for information about net operating losses of corporations. Free tax filing for students When Can I Deduct an Expense? When you can deduct an expense depends on your accounting method. Free tax filing for students An accounting method is a set of rules used to determine when and how income and expenses are reported. Free tax filing for students The two basic methods are the cash method and the accrual method. Free tax filing for students Whichever method you choose must clearly reflect income. Free tax filing for students For more information on accounting methods, see Publication 538. Free tax filing for students Cash method. Free tax filing for students   Under the cash method of accounting, you generally deduct business expenses in the tax year you pay them. Free tax filing for students Accrual method. Free tax filing for students   Under an accrual method of accounting, you generally deduct business expenses when both of the following apply. Free tax filing for students The all-events test has been met. Free tax filing for students The test is met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. Free tax filing for students Economic performance has occurred. Free tax filing for students Economic performance. Free tax filing for students   You generally cannot deduct or capitalize a business expense until economic performance occurs. Free tax filing for students If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided, or the property is used. Free tax filing for students If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Free tax filing for students Example. Free tax filing for students Your tax year is the calendar year. Free tax filing for students In December 2013, the Field Plumbing Company did some repair work at your place of business and sent you a bill for $600. Free tax filing for students You paid it by check in January 2014. Free tax filing for students If you use the accrual method of accounting, deduct the $600 on your tax return for 2013 because all events have occurred to “fix” the fact of liability (in this case the work was completed), the liability can be determined, and economic performance occurred in that year. Free tax filing for students If you use the cash method of accounting, deduct the expense on your 2014 return. Free tax filing for students Prepayment. Free tax filing for students   You generally cannot deduct expenses in advance, even if you pay them in advance. Free tax filing for students This rule applies to both the cash and accrual methods. Free tax filing for students It applies to prepaid interest, prepaid insurance premiums, and any other expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Free tax filing for students Example. Free tax filing for students In 2013, you sign a 10-year lease and immediately pay your rent for the first 3 years. Free tax filing for students Even though you paid the rent for 2013, 2014, and 2015, you can only deduct the rent for 2013 on your 2013 tax return. Free tax filing for students You can deduct the rent for 2014 and 2015 on your tax returns for those years. Free tax filing for students Contested liability. Free tax filing for students   Under the cash method, you can deduct a contested liability only in the year you pay the liability. Free tax filing for students Under the accrual method, you can deduct contested liabilities such as taxes (except foreign or U. Free tax filing for students S. Free tax filing for students possession income, war profits, and excess profits taxes) either in the tax year you pay the liability (or transfer money or other property to satisfy the obligation) or in the tax year you settle the contest. Free tax filing for students However, to take the deduction in the year of payment or transfer, you must meet certain conditions. Free tax filing for students See Regulations section 1. Free tax filing for students 461-2. Free tax filing for students Related person. Free tax filing for students   Under an accrual method of accounting, you generally deduct expenses when you incur them, even if you have not yet paid them. Free tax filing for students However, if you and the person you owe are related and that person uses the cash method of accounting, you must pay the expense before you can deduct it. Free tax filing for students Your deduction is allowed when the amount is includible in income by the related cash method payee. Free tax filing for students See Related Persons in Publication 538. Free tax filing for students Not-for-Profit Activities If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Free tax filing for students Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit. Free tax filing for students The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. Free tax filing for students It does not apply to corporations other than S corporations. Free tax filing for students In determining whether you are carrying on an activity for profit, several factors are taken into account. Free tax filing for students No one factor alone is decisive. Free tax filing for students Among the factors to consider are whether: You carry on the activity in a businesslike manner, The time and effort you put into the activity indicate you intend to make it profitable, You depend on the income for your livelihood, Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), You change your methods of operation in an attempt to improve profitability, You (or your advisors) have the knowledge needed to carry on the activity as a successful business, You were successful in making a profit in similar activities in the past, The activity makes a profit in some years, and You can expect to make a future profit from the appreciation of the assets used in the activity. Free tax filing for students Presumption of profit. Free tax filing for students   An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Free tax filing for students Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. Free tax filing for students The activity must be substantially the same for each year within this period. Free tax filing for students You have a profit when the gross income from an activity exceeds the deductions. Free tax filing for students   If a taxpayer dies before the end of the 5-year (or 7-year) period, the “test” period ends on the date of the taxpayer's death. Free tax filing for students   If your business or investment activity passes this 3- (or 2-) years-of-profit test, the IRS will presume it is carried on for profit. Free tax filing for students This means the limits discussed here will not apply. Free tax filing for students You can take all your business deductions from the activity, even for the years that you have a loss. Free tax filing for students You can rely on this presumption unless the IRS later shows it to be invalid. Free tax filing for students Using the presumption later. Free tax filing for students   If you are starting an activity and do not have 3 (or 2) years showing a profit, you can elect to have the presumption made after you have the 5 (or 7) years of experience allowed by the test. Free tax filing for students   You can elect to do this by filing Form 5213. Free tax filing for students Filing this form postpones any determination that your activity is not carried on for profit until 5 (or 7) years have passed since you started the activity. Free tax filing for students   The benefit gained by making this election is that the IRS will not immediately question whether your activity is engaged in for profit. Free tax filing for students Accordingly, it will not restrict your deductions. Free tax filing for students Rather, you will gain time to earn a profit in the required number of years. Free tax filing for students If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. Free tax filing for students If you do not have 3 (or 2) years of profit, the limit can be applied retroactively to any year with a loss in the 5-year (or 7-year) period. Free tax filing for students   Filing Form 5213 automatically extends the period of limitations on any year in the 5-year (or 7-year) period to 2 years after the due date of the return for the last year of the period. Free tax filing for students The period is extended only for deductions of the activity and any related deductions that might be affected. Free tax filing for students    You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. Free tax filing for students Gross Income Gross income from a not-for-profit activity includes the total of all gains from the sale, exchange, or other disposition of property, and all other gross receipts derived from the activity. Free tax filing for students Gross income from the activity also includes capital gains and rents received for the use of property which is held in connection with the activity. Free tax filing for students You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts. Free tax filing for students However, if you determine gross income by subtracting cost of goods sold from gross receipts, you must do so consistently, and in a manner that follows generally accepted methods of accounting. Free tax filing for students Limit on Deductions If your activity is not carried on for profit, take deductions in the following order and only to the extent stated in the three categories. Free tax filing for students If you are an individual, these deductions may be taken only if you itemize. Free tax filing for students These deductions may be taken on Schedule A (Form 1040). Free tax filing for students Category 1. Free tax filing for students   Deductions you can take for personal as well as for business activities are allowed in full. Free tax filing for students For individuals, all nonbusiness deductions, such as those for home mortgage interest, taxes, and casualty losses, belong in this category. Free tax filing for students Deduct them on the appropriate lines of Schedule A (Form 1040). Free tax filing for students For tax years beginning after December 31, 2008, you can deduct a casualty loss on property you own for personal use only to the extent it is more than $500 and exceeds 10% of your adjusted gross income (AGI). Free tax filing for students The 10% AGI limitation does not apply to net disaster losses resulting from federally declared disasters in 2008 and 2009, and individuals are allowed to claim the net disaster losses even if they do not itemize their deductions. Free tax filing for students The reduction amount returns to $100 for tax years beginning after December 31, 2009. Free tax filing for students See Publication 547 for more information on casualty losses. Free tax filing for students For the limits that apply to home mortgage interest, see Publication 936. Free tax filing for students Category 2. Free tax filing for students   Deductions that do not result in an adjustment to the basis of property are allowed next, but only to the extent your gross income from the activity is more than your deductions under the first category. Free tax filing for students Most business deductions, such as those for advertising, insurance premiums, interest, utilities, and wages, belong in this category. Free tax filing for students Category 3. Free tax filing for students   Business deductions that decrease the basis of property are allowed last, but only to the extent the gross income from the activity exceeds the deductions you take under the first two categories. Free tax filing for students Deductions for depreciation, amortization, and the part of a casualty loss an individual could not deduct in category (1) belong in this category. Free tax filing for students Where more than one asset is involved, allocate depreciation and these other deductions proportionally. Free tax filing for students    Individuals must claim the amounts in categories (2) and (3) as miscellaneous deductions on Schedule A (Form 1040). Free tax filing for students They are subject to the 2%-of-adjusted-gross-income limit. Free tax filing for students See Publication 529 for information on this limit. Free tax filing for students Example. Free tax filing for students Adriana is engaged in a not-for-profit activity. Free tax filing for students The income and expenses of the activity are as follows. Free tax filing for students Gross income $3,200 Subtract:     Real estate taxes $700   Home mortgage interest 900   Insurance 400   Utilities 700   Maintenance 200   Depreciation on an automobile 600   Depreciation on a machine 200 3,700 Loss $(500)   Adriana must limit her deductions to $3,200, the gross income she earned from the activity. Free tax filing for students The limit is reached in category (3), as follows. Free tax filing for students Limit on deduction $3,200 Category 1: Taxes and interest $1,600   Category 2: Insurance, utilities, and maintenance 1,300 2,900 Available for Category 3 $ 300   The $800 of depreciation is allocated between the automobile and machine as follows. Free tax filing for students $600 $800 x $300 = $225 depreciation for the automobile             $200 $800 x $300 = $75 depreciation for the machine The basis of each asset is reduced accordingly. Free tax filing for students Adriana includes the $3,200 of gross income on line 21 (other income) of Form 1040. Free tax filing for students The $1,600 for category (1) is deductible in full on the appropriate lines for taxes and interest on Schedule A (Form 1040). Free tax filing for students Adriana deducts the remaining $1,600 ($1,300 for category (2) and $300 for category (3)) as other miscellaneous deductions on Schedule A (Form 1040) subject to the 2%-of-adjusted-gross-income limit. Free tax filing for students Partnerships and S corporations. Free tax filing for students   If a partnership or S corporation carries on a not-for-profit activity, these limits apply at the partnership or S corporation level. Free tax filing for students They are reflected in the individual shareholder's or partner's distributive shares. Free tax filing for students More than one activity. Free tax filing for students   If you have several undertakings, each may be a separate activity or several undertakings may be combined. Free tax filing for students The following are the most significant facts and circumstances in making this determination. Free tax filing for students The degree of organizational and economic interrelationship of various undertakings. Free tax filing for students The business purpose that is (or might be) served by carrying on the various undertakings separately or together in a business or investment setting. Free tax filing for students The similarity of the undertakings. Free tax filing for students   The IRS will generally accept your characterization if it is supported by facts and circumstances. Free tax filing for students    If you are carrying on two or more different activities, keep the deductions and income from each one separate. Free tax filing for students Figure separately whether each is a not-for-profit activity. Free tax filing for students Then figure the limit on deductions and losses separately for each activity that is not for profit. Free tax filing for students Prev  Up  Next   Home   More Online Publications
Español

Cell Phones and Wireless Communication

Before you sign a contract and choose a plan and a company that meets your needs, you should ask these types of questions:

Where can you make and receive calls? Most providers now offer a choice of local, regional, or national plans. A local plan offers low-cost options if most of your calls are near home. Regional plans generally offer a larger geographic area - sometimes several states. If you call outside the area covered by these plans, you will pay long distance and roaming charges in addition to the airtime used. National plans are the most expensive, but they let you use your phone anywhere in the country for a single per-minute price.

How frequently will you use the phone? If you just want a phone for emergencies, an economy plan with a few minutes a month may be all you need. On the other hand, if you are going to be a heavy user, a plan with several free hours and the lowest airtime charge is a wiser choice. If you plan to use texting, pick a plan that will meet your needs and avoid surprises on your billing. Most services allow you to upgrade a plan without an added one-time charge.

Is a family plan option available? Instead of individual cell phone plans for each member of the family, you can share one cellular service plan and a pool of monthly usage minutes among several phones. The cost of the additional numbers per month is usually less than if you purchased individual accounts.

Is there a trial period? Many people experience "dead spots" where a cell phone doesn't work. A trial period lets you test your service and try the features of the phone without incurring a termination fee.

Know your options. Make sure you are only buying the options or features you really need. It is always easier to upgrade a plan later if you feel you need another feature.

What happens if you want to cancel your service? Most providers have a penalty. This is a concern if you have to move out of the area covered by your plan.

Smart Phones

Smart phones are like miniature computers; they provide basic phone functions, along with advanced features, including browsing the Internet, accessing e-mail, interacting on online social networks, listening to music, watching videos, uploading pictures, and managing your calendar. They also allow use of a QWERTY keyboard to facilitate texting and e-mailing. (The keys are arranged the same way they would be on your computer keyboard.)

When shopping for a smart phone, consider these tips:

  • Consider the shape and size of the phone.
  • Make sure you can easily use the keypad to make calls or send messages.
  • Do you need to access the Internet with your phone? If so, ask whether a data plan is required and how much it costs; compare options carefully. Data plans govern use and costs associated with mobile access for e-mail, text messaging, web browsing, social networking, and other applications.
  • Take advantage of special pricing and promotions.
  • Learn the return and cancellation policies.
  • Be wary of buying phone insurance, which may sound tempting, but consumer groups generally advise against it.

If there is a particular phone model you are interested in buying, investigate which service providers actually carry the phone. If your service provider carries the phone, they may require you to renew or extend your current contract; you may also be required to upgrade the service plan you have in order to access all of the phone’s features. Some phone models are available exclusively with only one service provider. This may require you to terminate a contract with your current provider and start a new contractual agreement with a new provider. Under the Federal Communication Commission’s (FCC’s) local number portability rules, so long as you remain in the same geographic area, you can take your phone number with you when you move from one service provider to a different one.

Apps for Your Smartphone

“Apps”, short for applications, are tools that help you accomplish tasks or find information when you are on the go. Apps are designed to work on smart phones and may be downloaded or accessed using your phone’s web browser. Some apps are designed for specific platforms (Android, Blackberry, or iPhone), so make sure that you purchase apps that are compatible with your phone’s software requirements. While some apps are free, many of them do charge a small fee. Before you click “download”, keep in mind that the cost of your purchases are automatically deducted from your bank account or charged to your credit card or phone bill. Keep track of the amount of money that you spent on apps, to avoid shock when you receive your bill.
Visit the Apps gallery on usa.gov to download free apps from the government. Look for some of the consumer apps for product recalls, fuel economy, food safety, nutrition, and health information.

Privacy and Safety Concerns

Since smart phones are like miniature computers, many of the same privacy and safety concerns apply; however, unlike computers, these devices do not have anti-virus software to protect your phone from malware attacks, spyware, or text message spam. Therefore, you should take precautions with your phone, including:

  • Protect your passwords for websites you visit from your mobile phone, particularly financial institutions.
  • Refrain from posting your mobile phone number or email address publicly online.
  • Many mobile phones come with an email address that includes your mobile phone number in the address. Contact your service provider to have this email address changed.
  • Delete texts or emails from people that you don’t know. Don’t click any links in these messages.
  • Be careful about clicking on ads, as they can contain viruses.
  • Be careful about unlocking your cell phone from the manufacturer or service provider; this makes the phone more vulnerable to attack from malware.
  • Turn off your Bluetooth when not in use. They can be used by hackers to compromise your phone.
  • Encrypt passwords and other sensitive data saved on your cell phone.

For more information on how to protect yourself from these concerns, read more about online privacy.

Pay-As-You-Go Plans

If you want cell phone service only for emergencies or aren't sure how much you will actually use a cell phone once you get it, you may want to consider a prepaid cell phone before you commit to a long-term wireless contract. With a prepaid cell phone, there is no contract to sign and no monthly bill to worry about. You will know exactly how much you spend. The down side of prepaid plans is that you pay more per minute, and if you don't use the phone for an extended period of time, you could lose the money in your account.

Disposing of Your Old Cell Phone

Even after you get a new mobile phone you may be wondering what to do with your old phone and charger. There are safe ways to dispose of your cell phone that can even be helpful to others and not hurt the environment. Before you dispose of it, make sure to clean the phone to protect your privacy:

  • Remove the subscriber identity module (SIM) card from the phone.
  • Delete the contacts in your phone book, text messages, voicemails, saved photos, and web search history.
  • Clear out your call and text history (both calls and texts received and made).

After you have taken these steps, you can now determine how to dispose of the phone. The Environmental Protection Agency (EPA) recommends that you not throw out electronics with your other trash, because they contain chemicals that can be harmful to the environment. It is recommended that you:

  • Recycle it. Many wireless service providers will accept your old phone at their retail stores. Similarly, you can send the phone and accessories to the phone manufacturer.
  • Donate it to an organization that can use it for charitable purposes.
  • Resell it.

The Free Tax Filing For Students

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