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Free Tax Preparation 2012

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Free Tax Preparation 2012

Free tax preparation 2012 1. Free tax preparation 2012   Filing Information Table of Contents What's New Reminders Introduction Do I Have To File a Return?Individuals—In General Dependents Certain Children Under Age 19 or Full-Time Students Self-Employed Persons Aliens Who Should File Which Form Should I Use?Form 1040EZ Form 1040A Form 1040 Does My Return Have To Be on Paper?IRS e-file When Do I Have To File?Private delivery services. Free tax preparation 2012 Extensions of Time To File How Do I Prepare My Return?When Do I Report My Income and Expenses? Social Security Number (SSN) Presidential Election Campaign Fund Computations Attachments Third Party Designee Signatures Paid Preparer Refunds Amount You Owe Gift To Reduce Debt Held by the Public Name and Address Where Do I File? What Happens After I File?What Records Should I Keep? Why Keep Records? Kinds of Records to Keep Basic Records How Long to Keep Records Refund Information Interest on Refunds Change of Address What If I Made a Mistake?Amended Returns and Claims for Refund Penalties Identity Theft What's New Filing status for same-sex married couple. Free tax preparation 2012   If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Free tax preparation 2012 See Publication 501 for more information. Free tax preparation 2012 Additional Medicare Tax. Free tax preparation 2012  Beginning in 2013, a 0. Free tax preparation 2012 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income over a threshold amount based on your filing status. Free tax preparation 2012 For more information, see the Instructions for Form 1040, line 60, and Form 8959. Free tax preparation 2012 Net Investment Income Tax. Free tax preparation 2012  Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). Free tax preparation 2012 NIIT is a 3. Free tax preparation 2012 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income over a threshold amount. Free tax preparation 2012 For more information, see the Instructions for Form 1040, line 60, and Form 8960. Free tax preparation 2012 Refundable credit for prior year minimum tax. Free tax preparation 2012  The refundable portion of the credit for prior year minimum tax is no longer available. Free tax preparation 2012 Who must file. Free tax preparation 2012  Generally, the amount of income you can receive before you must file a return has been increased. Free tax preparation 2012 See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts. Free tax preparation 2012 Reminders File online. Free tax preparation 2012  Rather than filing a return on paper, you may be able to file electronically using IRS e-file. Free tax preparation 2012 Create your own personal identification number (PIN) and file a completely paperless tax return. Free tax preparation 2012 For more information, see Does My Return Have To Be on Paper , later. Free tax preparation 2012 Change of address. Free tax preparation 2012  If you change your address, you should notify the IRS. Free tax preparation 2012 You can use Form 8822 to notify the IRS of the change. Free tax preparation 2012 See Change of Address , later, under What Happens After I File. Free tax preparation 2012 Enter your social security number. Free tax preparation 2012  You must enter your social security number (SSN) in the spaces provided on your tax return. Free tax preparation 2012 If you file a joint return, enter the SSNs in the same order as the names. Free tax preparation 2012 Direct deposit of refund. Free tax preparation 2012  Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. Free tax preparation 2012 See Direct Deposit under Refunds, later. Free tax preparation 2012 If you choose direct deposit of your refund, you may be able to split the refund among two or three accounts. Free tax preparation 2012 Pay online or by phone. Free tax preparation 2012  If you owe additional tax, you may be able to pay online or by phone. Free tax preparation 2012 See How To Pay , later. Free tax preparation 2012 Installment agreement. Free tax preparation 2012  If you cannot pay the full amount due with your return, you may ask to make monthly installment payments. Free tax preparation 2012 See Installment Agreement , later, under Amount You Owe. Free tax preparation 2012 You may be able to apply online for a payment agreement if you owe federal tax, interest, and penalties. Free tax preparation 2012 Automatic 6-month extension. Free tax preparation 2012  You can get an automatic 6-month extension to file your tax return if, no later than the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Free tax preparation 2012 S. Free tax preparation 2012 Individual Income Tax Return. Free tax preparation 2012 See Automatic Extension , later. Free tax preparation 2012 Service in combat zone. Free tax preparation 2012  You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in the combat zone in support of the Armed Forces. Free tax preparation 2012 See Individuals Serving in Combat Zone , later, under When Do I Have To File. Free tax preparation 2012 Adoption taxpayer identification number. Free tax preparation 2012  If a child has been placed in your home for purposes of legal adoption and you will not be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). Free tax preparation 2012 For more information, see Social Security Number (SSN) , later. Free tax preparation 2012 Taxpayer identification number for aliens. Free tax preparation 2012  If you or your dependent is a nonresident or resident alien who does not have and is not eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. Free tax preparation 2012 For more information, see Social Security Number (SSN) , later. Free tax preparation 2012 Frivolous tax submissions. Free tax preparation 2012  The IRS has published a list of positions that are identified as frivolous. Free tax preparation 2012 The penalty for filing a frivolous tax return is $5,000. Free tax preparation 2012 Also, the $5,000 penalty will apply to other specified frivolous submissions. Free tax preparation 2012 For more information, see Civil Penalties , later. Free tax preparation 2012 Introduction This chapter discusses the following topics. Free tax preparation 2012 Whether you have to file a return. Free tax preparation 2012 Which form to use. Free tax preparation 2012 How to file electronically. Free tax preparation 2012 When, how, and where to file your return. Free tax preparation 2012 What happens if you pay too little or too much tax. Free tax preparation 2012 What records you should keep and how long you should keep them. Free tax preparation 2012 How you can change a return you have already filed. Free tax preparation 2012 Do I Have To File a Return? You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you. Free tax preparation 2012 Individuals in general. Free tax preparation 2012 (There are special rules for surviving spouses, executors, administrators, legal representatives, U. Free tax preparation 2012 S. Free tax preparation 2012 citizens and residents living outside the United States, residents of Puerto Rico, and individuals with income from U. Free tax preparation 2012 S. Free tax preparation 2012 possessions. Free tax preparation 2012 ) Dependents. Free tax preparation 2012 Certain children under age 19 or full-time students. Free tax preparation 2012 Self-employed persons. Free tax preparation 2012 Aliens. Free tax preparation 2012 The filing requirements for each category are explained in this chapter. Free tax preparation 2012 The filing requirements apply even if you do not owe tax. Free tax preparation 2012 Even if you do not have to file a return, it may be to your advantage to do so. Free tax preparation 2012 See Who Should File, later. Free tax preparation 2012 File only one federal income tax return for the year regardless of how many jobs you had, how many Forms W-2 you received, or how many states you lived in during the year. Free tax preparation 2012 Do not file more than one original return for the same year, even if you have not gotten your refund or have not heard from the IRS since you filed. Free tax preparation 2012 Individuals—In General If you are a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen or resident, whether you must file a return depends on three factors: Your gross income, Your filing status, and Your age. Free tax preparation 2012 To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Free tax preparation 2012 Even if no table shows that you must file, you may need to file to get money back. Free tax preparation 2012 (See Who Should File , later. Free tax preparation 2012 ) Gross income. Free tax preparation 2012   This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. Free tax preparation 2012 It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it). Free tax preparation 2012 Include part of your social security benefits if: You were married, filing a separate return, and you lived with your spouse at any time during 2013; or Half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). Free tax preparation 2012 If either (1) or (2) applies, see the instructions for Form 1040 or 1040A, or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the social security benefits you must include in gross income. Free tax preparation 2012   Common types of income are discussed in Part Two of this publication. Free tax preparation 2012 Community income. Free tax preparation 2012   If you are married and your permanent home is in a community property state, half of any income described by state law as community income may be considered yours. Free tax preparation 2012 This affects your federal taxes, including whether you must file if you do not file a joint return with your spouse. Free tax preparation 2012 See Publication 555, Community Property, for more information. Free tax preparation 2012 Nevada, Washington, and California domestic partners. Free tax preparation 2012   A registered domestic partner in Nevada, Washington, or California generally must report half the combined community income of the individual and his or her domestic partner. Free tax preparation 2012 See Publication 555. Free tax preparation 2012 Self-employed individuals. Free tax preparation 2012   If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business; line 1 of Schedule C-EZ (Form 1040), Net Profit From Business; and line 9 of Schedule F (Form 1040), Profit or Loss From Farming. Free tax preparation 2012 See Self-Employed Persons , later, for more information about your filing requirements. Free tax preparation 2012    If you do not report all of your self-employment income, your social security benefits may be lower when you retire. Free tax preparation 2012 Filing status. Free tax preparation 2012   Your filing status depends on whether you are single or married and on your family situation. Free tax preparation 2012 Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. Free tax preparation 2012 See chapter 2 for an explanation of each filing status. Free tax preparation 2012 Age. Free tax preparation 2012   If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. Free tax preparation 2012 See Table 1-1. Free tax preparation 2012 You are considered 65 on the day before your 65th birthday. Free tax preparation 2012 For example, if your 65th birthday is on January 1, 2014, you are considered 65 for 2013. Free tax preparation 2012 Table 1-1. Free tax preparation 2012 2013 Filing Requirements for Most Taxpayers IF your filing status is. Free tax preparation 2012 . Free tax preparation 2012 . Free tax preparation 2012 AND at the end of 2013 you  were. Free tax preparation 2012 . Free tax preparation 2012 . Free tax preparation 2012 * THEN file a return if  your gross income  was at least. Free tax preparation 2012 . Free tax preparation 2012 . Free tax preparation 2012 ** single under 65 $10,000     65 or older $11,500   married filing jointly*** under 65 (both spouses) $20,000     65 or older (one spouse) $21,200     65 or older (both spouses) $22,400   married filing separately any age $3,900   head of household under 65 $12,850     65 or older $14,350   qualifying widow(er) with dependent child under 65 $16,100   65 or older $17,300   * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Free tax preparation 2012 ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Free tax preparation 2012 Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). Free tax preparation 2012 If (a) or (b) applies, see the Instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits you must include in gross income. Free tax preparation 2012 Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Free tax preparation 2012 Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. Free tax preparation 2012 But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. Free tax preparation 2012 *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900, you must file a return regardless of your age. Free tax preparation 2012 Surviving Spouses, Executors, Administrators, and Legal Representatives You must file a final return for a decedent (a person who died) if both of the following are true. Free tax preparation 2012 You are the surviving spouse, executor, administrator, or legal representative. Free tax preparation 2012 The decedent met the filing requirements at the date of death. Free tax preparation 2012 For more information on rules for filing a decedent's final return, see Publication 559, Survivors, Executors, and Administrators. Free tax preparation 2012 U. Free tax preparation 2012 S. Free tax preparation 2012 Citizens and Resident Aliens Living Abroad To determine whether you must file a return, include in your gross income any income you received abroad, including any income you can exclude under the foreign earned income exclusion. Free tax preparation 2012 For information on special tax rules that may apply to you, see Publication 54, Tax Guide for U. Free tax preparation 2012 S. Free tax preparation 2012 Citizens and Resident Aliens Abroad. Free tax preparation 2012 It is available online and at most U. Free tax preparation 2012 S. Free tax preparation 2012 embassies and consulates. Free tax preparation 2012 See How To Get Tax Help in the back of this publication. Free tax preparation 2012 Residents of Puerto Rico If you are a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen and also a bona fide resident of Puerto Rico, you generally must file a U. Free tax preparation 2012 S. Free tax preparation 2012 income tax return for any year in which you meet the income requirements. Free tax preparation 2012 This is in addition to any legal requirement you may have to file an income tax return with Puerto Rico. Free tax preparation 2012 If you are a bona fide resident of Puerto Rico for the entire year, your U. Free tax preparation 2012 S. Free tax preparation 2012 gross income does not include income from sources within Puerto Rico. Free tax preparation 2012 It does, however, include any income you received for your services as an employee of the United States or a U. Free tax preparation 2012 S. Free tax preparation 2012 agency. Free tax preparation 2012 If you receive income from Puerto Rican sources that is not subject to U. Free tax preparation 2012 S. Free tax preparation 2012 tax, you must reduce your standard deduction. Free tax preparation 2012 As a result, the amount of income you must have before you are required to file a U. Free tax preparation 2012 S. Free tax preparation 2012 income tax return is lower than the applicable amount in Table 1-1 or Table 1-2. Free tax preparation 2012 For more information, see Publication 570, Tax Guide for Individuals With Income From U. Free tax preparation 2012 S. Free tax preparation 2012 Possessions. Free tax preparation 2012 Individuals With Income From U. Free tax preparation 2012 S. Free tax preparation 2012 Possessions If you had income from Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the U. Free tax preparation 2012 S. Free tax preparation 2012 Virgin Islands, special rules may apply when determining whether you must file a U. Free tax preparation 2012 S. Free tax preparation 2012 federal income tax return. Free tax preparation 2012 In addition, you may have to file a return with the individual island government. Free tax preparation 2012 See Publication 570 for more information. Free tax preparation 2012 Dependents If you are a dependent (one who meets the dependency tests in chapter 3), see Table 1-2 to find out whether you must file a return. Free tax preparation 2012 You also must file if your situation is described in Table 1-3. Free tax preparation 2012 Responsibility of parent. Free tax preparation 2012   Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. Free tax preparation 2012 If a dependent child must file an income tax return but cannot file due to age or any other reason, then a parent, guardian, or other legally responsible person must file it for the child. Free tax preparation 2012 If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words “By (your signature), parent for minor child. Free tax preparation 2012 ” Child's earnings. Free tax preparation 2012   Amounts a child earns by performing services are included in his or her gross income and not the gross income of the parent. Free tax preparation 2012 This is true even if under local law the child's parent has the right to the earnings and may actually have received them. Free tax preparation 2012 But if the child does not pay the tax due on this income, the parent is liable for the tax. Free tax preparation 2012 Certain Children Under Age 19 or Full-Time Students If a child's only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends), the child was under age 19 at the end of 2013 or was a full-time student under age 24 at the end of 2013, and certain other conditions are met, a parent can elect to include the child's income on the parent's return. Free tax preparation 2012 If this election is made, the child does not have to file a return. Free tax preparation 2012 See Parent's Election To Report Child's Interest and Dividends in chapter 31. Free tax preparation 2012 Self-Employed Persons You are self-employed if you: Carry on a trade or business as a sole proprietor, Are an independent contractor, Are a member of a partnership, or Are in business for yourself in any other way. Free tax preparation 2012 Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job. Free tax preparation 2012 You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Free tax preparation 2012 Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if: Your net earnings from self-employment (excluding church employee income) were $400 or more, or You had church employee income of $108. Free tax preparation 2012 28 or more. Free tax preparation 2012 (See Table 1-3. Free tax preparation 2012 ) Use Schedule SE (Form 1040) to figure your self-employment tax. Free tax preparation 2012 Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. Free tax preparation 2012 For more information about this tax, see Publication 334, Tax Guide for Small Business. Free tax preparation 2012 Employees of foreign governments or international organizations. Free tax preparation 2012   If you are a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen who works in the United States for an international organization, a foreign government, or a wholly owned instrumentality of a foreign government, and your employer is not required to withhold social security and Medicare taxes from your wages, you must include your earnings from services performed in the United States when figuring your net earnings from self-employment. Free tax preparation 2012 Ministers. Free tax preparation 2012   You must include income from services you performed as a minister when figuring your net earnings from self-employment, unless you have an exemption from self-employment tax. Free tax preparation 2012 This also applies to Christian Science practitioners and members of a religious order who have not taken a vow of poverty. Free tax preparation 2012 For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Free tax preparation 2012 Table 1-2. Free tax preparation 2012 2013 Filing Requirements for Dependents See chapter 3 to find out if someone can claim you as a dependent. Free tax preparation 2012 If your parents (or someone else) can claim you as a dependent, use this table to see if you must file a return. Free tax preparation 2012 (See Table 1-3 for other situations when you must file. Free tax preparation 2012 ) In this table, earned income includes salaries, wages, tips, and professional fees. Free tax preparation 2012 It also includes taxable scholarship and fellowship grants. Free tax preparation 2012 (See Scholarships and fellowships in chapter 12. Free tax preparation 2012 ) Unearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions. Free tax preparation 2012 It also includes unemployment compensation, taxable social security benefits, pensions, annuities, cancellation of debt, and distributions of unearned income from a trust. Free tax preparation 2012 Gross income is the total of your earned and unearned income. Free tax preparation 2012   Single dependents—Were you either age 65 or older or blind? □ No. Free tax preparation 2012 You must file a return if any of the following apply. Free tax preparation 2012     • Your unearned income was more than $1,000. Free tax preparation 2012     • Your earned income was more than $6,100. Free tax preparation 2012     • Your gross income was more than the larger of:       • $1,000, or       • Your earned income (up to $5,750) plus $350. Free tax preparation 2012 □ Yes. Free tax preparation 2012 You must file a return if any of the following apply. Free tax preparation 2012     • Your unearned income was more than $2,500 ($4,000 if 65 or older and blind). Free tax preparation 2012     • Your earned income was more than $7,600 ($9,100 if 65 or older and blind). Free tax preparation 2012     • Your gross income was more than the larger of:       • $2,500 ($4,000 if 65 or older and blind), or       • Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). Free tax preparation 2012 Married dependents—Were you either age 65 or older or blind? □ No. Free tax preparation 2012 You must file a return if any of the following apply. Free tax preparation 2012     • Your unearned income was more than $1,000. Free tax preparation 2012     • Your earned income was more than $6,100. Free tax preparation 2012     • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Free tax preparation 2012     • Your gross income was more than the larger of:       • $1,000, or       • Your earned income (up to $5,750) plus $350. Free tax preparation 2012 □ Yes. Free tax preparation 2012 You must file a return if any of the following apply. Free tax preparation 2012     • Your unearned income was more than $2,200 ($3,400 if 65 or older and blind). Free tax preparation 2012     • Your earned income was more than $7,300 ($8,500 if 65 or older and blind). Free tax preparation 2012     • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Free tax preparation 2012     • Your gross income was more than the larger of:       • $2,200 ($3,400 if 65 or older and blind), or       • Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). Free tax preparation 2012 Aliens Your status as an alien—resident, nonresident, or dual-status—determines whether and how you must file an income tax return. Free tax preparation 2012 The rules used to determine your alien status are discussed in Publication 519, U. Free tax preparation 2012 S. Free tax preparation 2012 Tax Guide for Aliens. Free tax preparation 2012 Resident alien. Free tax preparation 2012   If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U. Free tax preparation 2012 S. Free tax preparation 2012 citizens. Free tax preparation 2012 Use the forms discussed in this publication. Free tax preparation 2012 Nonresident alien. Free tax preparation 2012   If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U. Free tax preparation 2012 S. Free tax preparation 2012 citizens and resident aliens. Free tax preparation 2012 See Publication 519 to find out if U. Free tax preparation 2012 S. Free tax preparation 2012 income tax laws apply to you and which forms you should file. Free tax preparation 2012 Dual-status taxpayer. Free tax preparation 2012   If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Free tax preparation 2012 Different rules apply for each part of the year. Free tax preparation 2012 For information on dual-status taxpayers, see Publication 519. Free tax preparation 2012 Table 1-3. Free tax preparation 2012 Other Situations When You Must File a 2013 Return You must file a return if any of the four conditions below apply for 2013. Free tax preparation 2012 1. Free tax preparation 2012   You owe any special taxes, including any of the following. Free tax preparation 2012   a. Free tax preparation 2012 Alternative minimum tax. Free tax preparation 2012   b. Free tax preparation 2012 Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Free tax preparation 2012 But if you are filing a return only because you owe this tax, you can file Form 5329 by itself. Free tax preparation 2012   c. Free tax preparation 2012 Household employment taxes. Free tax preparation 2012 But if you are filing a return only because you owe this tax, you can file Schedule H by itself. Free tax preparation 2012   d. Free tax preparation 2012 Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes. Free tax preparation 2012   e. Free tax preparation 2012 Recapture of first-time homebuyer credit. Free tax preparation 2012   f. Free tax preparation 2012 Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts. Free tax preparation 2012   g. Free tax preparation 2012 Recapture taxes. Free tax preparation 2012 2. Free tax preparation 2012   You (or your spouse, if filing jointly) received HSA, Archer MSA, or Medicare Advantage MSA distributions. Free tax preparation 2012 3. Free tax preparation 2012   You had net earnings from self-employment of at least $400. Free tax preparation 2012 4. Free tax preparation 2012   You had wages of $108. Free tax preparation 2012 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Free tax preparation 2012 Who Should File Even if you do not have to file, you should file a federal income tax return to get money back if any of the following conditions apply. Free tax preparation 2012 You had federal income tax withheld or made estimated tax payments. Free tax preparation 2012 You qualify for the earned income credit. Free tax preparation 2012 See chapter 36 for more information. Free tax preparation 2012 You qualify for the additional child tax credit. Free tax preparation 2012 See chapter 34 for more information. Free tax preparation 2012 You qualify for the health coverage tax credit. Free tax preparation 2012 See chapter 37 for more information. Free tax preparation 2012 You qualify for the American opportunity credit. Free tax preparation 2012 See chapter 35 for more information. Free tax preparation 2012 You qualify for the credit for federal tax on fuels. Free tax preparation 2012 See chapter 37 for more information. Free tax preparation 2012 Which Form Should I Use? You must use one of three forms to file your return: Form 1040EZ, Form 1040A, or Form 1040. Free tax preparation 2012 (But also see Does My Return Have To Be on Paper , later. Free tax preparation 2012 ) See the discussion under Form 1040 for when you must use that form. Free tax preparation 2012 Form 1040EZ Form 1040EZ is the simplest form to use. Free tax preparation 2012 You can use Form 1040EZ if all of the following apply. Free tax preparation 2012    Your filing status is single or married filing jointly. Free tax preparation 2012 If you were a nonresident alien at any time in 2013, your filing status must be married filing jointly. Free tax preparation 2012 You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2013. Free tax preparation 2012 If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Free tax preparation 2012 You do not claim any dependents. Free tax preparation 2012 Your taxable income is less than $100,000. Free tax preparation 2012 Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less. Free tax preparation 2012 You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest. Free tax preparation 2012 You do not claim any credits other than the earned income credit. Free tax preparation 2012 You do not owe any household employment taxes on wages you paid to a household employee. Free tax preparation 2012 If you earned tips, they are included in boxes 5 and 7 of your Form W-2. Free tax preparation 2012 You are not a debtor in a chapter 11 bankruptcy case filed after October 16, 2005. Free tax preparation 2012   You must meet all of these requirements to use Form 1040EZ. Free tax preparation 2012 If you do not, you must use Form 1040A or Form 1040. Free tax preparation 2012 Figuring tax. Free tax preparation 2012   On Form 1040EZ, you can use only the tax table to figure your income tax. Free tax preparation 2012 You cannot use Form 1040EZ to report any other tax. Free tax preparation 2012 Form 1040A If you do not qualify to use Form 1040EZ, you may be able to use Form 1040A. Free tax preparation 2012 You can use Form 1040A if all of the following apply. Free tax preparation 2012    Your income is only from: Wages, salaries, and tips, Interest, Ordinary dividends (including Alaska Permanent Fund dividends), Capital gain distributions, IRA distributions, Pensions and annuities, Unemployment compensation, Taxable social security and railroad retirement benefits, and Taxable scholarship and fellowship grants. Free tax preparation 2012 If you receive a capital gain distribution that includes unrecaptured section 1250 gain, section 1202 gain, or collectibles (28%) gain, you cannot use Form 1040A. Free tax preparation 2012 You must use Form 1040. Free tax preparation 2012 Your taxable income is less than $100,000. Free tax preparation 2012 Your adjustments to income are for only the following items. Free tax preparation 2012 Educator expenses. Free tax preparation 2012 IRA deduction. Free tax preparation 2012 Student loan interest deduction. Free tax preparation 2012 Tuition and fees. Free tax preparation 2012 You do not itemize your deductions. Free tax preparation 2012 You claim only the following tax credits. Free tax preparation 2012 The credit for child and dependent care expenses. Free tax preparation 2012 (See chapter 32. Free tax preparation 2012 ) The credit for the elderly or the disabled. Free tax preparation 2012 (See chapter 33. Free tax preparation 2012 ) The education credits. Free tax preparation 2012 (See chapter 35. Free tax preparation 2012 ) The retirement savings contribution credit. Free tax preparation 2012 (See chapter 37. Free tax preparation 2012 ) The child tax credit. Free tax preparation 2012 (See chapter 34. Free tax preparation 2012 ) The earned income credit. Free tax preparation 2012 (See chapter 36. Free tax preparation 2012 ) The additional child tax credit. Free tax preparation 2012 (See chapter 34. Free tax preparation 2012 ) You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. Free tax preparation 2012 (See Publication 525, Taxable and Nontaxable Income. Free tax preparation 2012 )   You can also use Form 1040A if you received employer-provided dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax. Free tax preparation 2012   You must meet all these requirements to use Form 1040A. Free tax preparation 2012 If you do not, you must use Form 1040. Free tax preparation 2012 Form 1040 If you cannot use Form 1040EZ or Form 1040A, you must use Form 1040. Free tax preparation 2012 You can use Form 1040 to report all types of income, deductions, and credits. Free tax preparation 2012 You may pay less tax by filing Form 1040 because you can take itemized deductions, some adjustments to income, and credits you cannot take on Form 1040A or Form 1040EZ. Free tax preparation 2012 You must use Form 1040 if any of the following apply. Free tax preparation 2012    Your taxable income is $100,000 or more. Free tax preparation 2012 You itemize your deductions on Schedule A. Free tax preparation 2012 You had income that cannot be reported on Form 1040EZ or Form 1040A, including tax-exempt interest from private activity bonds issued after August 7, 1986. Free tax preparation 2012 You claim any adjustments to gross income other than the adjustments listed earlier under Form 1040A. Free tax preparation 2012 Your Form W-2, box 12, shows uncollected employee tax (social security and Medicare tax) on tips (see chapter 6) or group-term life insurance (see chapter 5). Free tax preparation 2012 You received $20 or more in tips in any 1 month and did not report all of them to your employer. Free tax preparation 2012 (See chapter 6. Free tax preparation 2012 ) You were a bona fide resident of Puerto Rico and exclude income from sources in Puerto Rico. Free tax preparation 2012 You claim any credits other than the credits listed earlier under Form 1040A. Free tax preparation 2012 You owe the excise tax on insider stock compensation from an expatriated corporation. Free tax preparation 2012 Your Form W-2 shows an amount in box 12 with a code Z. Free tax preparation 2012 You had a qualified health savings account funding distribution from your IRA. Free tax preparation 2012 You are an employee and your employer did not withhold social security and Medicare tax. Free tax preparation 2012 You have to file other forms with your return to report certain exclusions, taxes, or transactions, such as Form 8959 or Form 8960. Free tax preparation 2012 You are a debtor in a bankruptcy case filed after October 16, 2005. Free tax preparation 2012 You must repay the first-time homebuyer credit. Free tax preparation 2012 You have adjusted gross income of more than $150,000 and must reduce the dollar amount of your exemptions. Free tax preparation 2012 Does My Return Have To Be on Paper? You may be able to file a paperless return using IRS e-file (electronic filing). Free tax preparation 2012 If your 2013 adjusted gross income (AGI) is less than a certain amount, you are eligible for Free File. Free tax preparation 2012 See your tax return instructions for details. Free tax preparation 2012 If you do not qualify for Free File, then you should check out IRS. Free tax preparation 2012 gov for low-cost e-file options or Free File Fillable Forms. Free tax preparation 2012 IRS e-file Table 1-4 lists the benefits of IRS e-file. Free tax preparation 2012 IRS e-file uses automation to replace most of the manual steps needed to process paper returns. Free tax preparation 2012 As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. Free tax preparation 2012 However, as with a paper return, you are responsible for making sure your return contains accurate information and is filed on time. Free tax preparation 2012 Using e-file does not affect your chances of an IRS examination of your return. Free tax preparation 2012 Free File Fillable Forms. Free tax preparation 2012   If you do not need the help of a tax preparer, then Free File Fillable Forms may be for you. Free tax preparation 2012 These forms: Do not have an income requirement so everyone is eligible, Are easy to use, Perform basic math calculations, Are available only at IRS. Free tax preparation 2012 gov, and Apply only to a federal tax return. Free tax preparation 2012 Electronic return signatures. Free tax preparation 2012   To file your return electronically, you must sign the return electronically using a personal identification number (PIN). Free tax preparation 2012 If you are filing online, you must use a Self-Select PIN. Free tax preparation 2012 If you are filing electronically using a tax practitioner, you can use a Self-Select PIN or a Practitioner PIN. Free tax preparation 2012 Self-Select PIN. Free tax preparation 2012   The Self-Select PIN method allows you to create your own PIN. Free tax preparation 2012 If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures. Free tax preparation 2012   A PIN is any combination of five digits you choose except five zeros. Free tax preparation 2012 If you use a PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. Free tax preparation 2012   To verify your identity, you will be prompted to enter your adjusted gross income (AGI) from your originally filed 2012 federal income tax return, if applicable. Free tax preparation 2012 Do not use your AGI from an amended return (Form 1040X) or a math error correction made by the IRS. Free tax preparation 2012 AGI is the amount shown on your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040EZ, line 4. Free tax preparation 2012 If you do not have your 2012 income tax return, you can quickly request a transcript by using our automated self-service tool. Free tax preparation 2012 Visit us at IRS. Free tax preparation 2012 gov and click on Order a Return or Account Transcript or call 1-800-908-9946 to get a free transcript of your return. Free tax preparation 2012 (If you filed electronically last year, you may use your prior year PIN to verify your identity instead of your prior year AGI. Free tax preparation 2012 The prior year PIN is the five digit PIN you used to electronically sign your 2012 return. Free tax preparation 2012 ) You will also be prompted to enter your date of birth. Free tax preparation 2012 Table 1-4. Free tax preparation 2012 Benefits of IRS e-file • Free File allows qualified taxpayers to prepare and e-file their own tax returns for free. Free tax preparation 2012 • Free File is available in English and Spanish. Free tax preparation 2012 • Free File is available online 24 hours a day, 7 days a week. Free tax preparation 2012 • Get your refund faster by e-filing using Direct Deposit. Free tax preparation 2012 • Sign electronically with a secure self-selected PIN and file a completely paperless return. Free tax preparation 2012 • Receive an acknowledgement that your return was received and accepted. Free tax preparation 2012 • If you owe, you can e-file and pay electronically either online or by phone, using your bank account or a credit or debit card. Free tax preparation 2012 You can also file a return early and pay the amount you owe by the due date of your return. Free tax preparation 2012 • Save time by preparing and e-filing federal and state returns together. Free tax preparation 2012 • IRS computers quickly and automatically check for errors or other missing information. Free tax preparation 2012 • Help the environment, use less paper, and save taxpayer money—it costs less to process an e-filed return than a paper return. Free tax preparation 2012 You cannot use the Self-Select PIN method if you are a first-time filer under age 16 at the end of 2013. Free tax preparation 2012 If you cannot locate your prior year AGI or prior year PIN, use the Electronic Filing PIN Request. Free tax preparation 2012 This can be found at IRS. Free tax preparation 2012 gov. Free tax preparation 2012 Click on Request an Electronic Filing PIN. Free tax preparation 2012 Or you can call 1-866-704-7388. Free tax preparation 2012 Practitioner PIN. Free tax preparation 2012   The Practitioner PIN method allows you to authorize your tax practitioner to enter or generate your PIN. Free tax preparation 2012 The practitioner can provide you with details. Free tax preparation 2012 Form 8453. Free tax preparation 2012   You must send in a paper Form 8453 if you have to attach certain forms or other documents that cannot be electronically filed. Free tax preparation 2012 For details, see Form 8453. Free tax preparation 2012 For more details, visit www. Free tax preparation 2012 irs. Free tax preparation 2012 gov/efile and click on “ Individuals. Free tax preparation 2012 ” Identity Protection PIN. Free tax preparation 2012   If the IRS gave you an identity protection personal identification number (PIN) because you were a victim of identity theft, enter it in the spaces provided on your tax form. Free tax preparation 2012 If the IRS has not given you this type of number, leave these spaces blank. Free tax preparation 2012 For more information, see the Instructions for Form 1040A or Form 1040. Free tax preparation 2012 Power of attorney. Free tax preparation 2012   If an agent is signing your return for you, a power of attorney (POA) must be filed. Free tax preparation 2012 Attach the POA to Form 8453 and file it using that form's instructions. Free tax preparation 2012 See Signatures , later, for more information on POAs. Free tax preparation 2012 State returns. Free tax preparation 2012   In most states, you can file an electronic state return simultaneously with your federal return. Free tax preparation 2012 For more information, check with your local IRS office, state tax agency, tax professional, or the IRS website at  www. Free tax preparation 2012 irs. Free tax preparation 2012 gov/efile. Free tax preparation 2012 Refunds. Free tax preparation 2012   You can have a refund check mailed to you, or you can have your refund deposited directly to your checking or savings account or split among two or three accounts. Free tax preparation 2012 With e-file, your refund will be issued faster than if you filed on paper. Free tax preparation 2012   As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. Free tax preparation 2012 See Offset against debts under Refunds, later. Free tax preparation 2012 Refund inquiries. Free tax preparation 2012   Information about your return will generally be available within 24 hours after the IRS receives your e-filed return. Free tax preparation 2012 See Refund Information , later. Free tax preparation 2012 Amount you owe. Free tax preparation 2012   To avoid late-payment penalties and interest, pay your taxes in full by April 15, 2014. Free tax preparation 2012 See How To Pay , later, for information on how to pay the amount you owe. Free tax preparation 2012 Using Your Personal Computer You can file your tax return in a fast, easy, and convenient way using your personal computer. Free tax preparation 2012 A computer with Internet access and tax preparation software are all you need. Free tax preparation 2012 Best of all, you can e-file from the comfort of your home 24 hours a day, 7 days a week. Free tax preparation 2012 IRS approved tax preparation software is available for online use on the Internet, for download from the Internet, and in retail stores. Free tax preparation 2012 For information, visit www. Free tax preparation 2012 irs. Free tax preparation 2012 gov/efile. Free tax preparation 2012 Through Employers and Financial Institutions Some businesses offer free e-file to their employees, members, or customers. Free tax preparation 2012 Others offer it for a fee. Free tax preparation 2012 Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit. Free tax preparation 2012 Free Help With Your Return Free help in preparing your return is available nationwide from IRS-trained volunteers. Free tax preparation 2012 The Volunteer Income Tax Assistance (VITA) program is designed to help low to moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Free tax preparation 2012 Many VITA sites offer free electronic filing and all volunteers will let you know about the credits and deductions you may be entitled to claim. Free tax preparation 2012 To find a site near you, call 1-800-906-9887. Free tax preparation 2012 Or to find the nearest AARP TaxAide site, visit AARP's website at www. Free tax preparation 2012 aarp. Free tax preparation 2012 org/taxaide or call 1-888-227-7669. Free tax preparation 2012 For more information on these programs, go to IRS. Free tax preparation 2012 gov and enter keyword “VITA” in the search box. Free tax preparation 2012 Using a Tax Professional Many tax professionals electronically file tax returns for their clients. Free tax preparation 2012 You may personally enter your PIN or complete Form 8879, IRS e-file Signature Authorization, to authorize the tax professional to enter your PIN on your return. Free tax preparation 2012 Note. Free tax preparation 2012 Tax professionals may charge a fee for IRS e-file. Free tax preparation 2012 Fees can vary depending on the professional and the specific services rendered. Free tax preparation 2012 When Do I Have To File? April 15, 2014, is the due date for filing your 2013 income tax return if you use the calendar year. Free tax preparation 2012 For a quick view of due dates for filing a return with or without an extension of time to file (discussed later), see Table 1-5. Free tax preparation 2012 Table 1-5. Free tax preparation 2012 When To File Your 2013 Return For U. Free tax preparation 2012 S. Free tax preparation 2012 citizens and residents who file returns on a calendar year. Free tax preparation 2012   For Most Taxpayers For Certain Taxpayers Outside the U. Free tax preparation 2012 S. Free tax preparation 2012 No extension requested April 15, 2014 June 16, 2014 Automatic extension October 15, 2014 October 15, 2014 If you use a fiscal year (a year ending on the last day of any month except December, or a 52-53-week year), your income tax return is due by the 15th day of the 4th month after the close of your fiscal year. Free tax preparation 2012 When the due date for doing any act for tax purposes—filing a return, paying taxes, etc. Free tax preparation 2012 —falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. Free tax preparation 2012 Filing paper returns on time. Free tax preparation 2012   Your paper return is filed on time if it is mailed in an envelope that is properly addressed, has enough postage, and is postmarked by the due date. Free tax preparation 2012 If you send your return by registered mail, the date of the registration is the postmark date. Free tax preparation 2012 The registration is evidence that the return was delivered. Free tax preparation 2012 If you send a return by certified mail and have your receipt postmarked by a postal employee, the date on the receipt is the postmark date. Free tax preparation 2012 The postmarked certified mail receipt is evidence that the return was delivered. Free tax preparation 2012 Private delivery services. Free tax preparation 2012   If you use a private delivery service designated by the IRS to send your return, the postmark date generally is the date the private delivery service records in its database or marks on the mailing label. Free tax preparation 2012 The private delivery service can tell you how to get written proof of this date. Free tax preparation 2012   For the IRS mailing address to use if you are using a private delivery service, go to IRS. Free tax preparation 2012 gov and enter “private delivery service” in the search box. Free tax preparation 2012   The following are designated private delivery services. Free tax preparation 2012 DHL Express (DHL): Same Day Service. Free tax preparation 2012 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Free tax preparation 2012 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Free tax preparation 2012 M. Free tax preparation 2012 , UPS Worldwide Express Plus, and UPS Worldwide Express. Free tax preparation 2012 Filing electronic returns on time. Free tax preparation 2012   If you use IRS e-file, your return is considered filed on time if the authorized electronic return transmitter postmarks the transmission by the due date. Free tax preparation 2012 An authorized electronic return transmitter is a participant in the IRS e-file program that transmits electronic tax return information directly to the IRS. Free tax preparation 2012   The electronic postmark is a record of when the authorized electronic return transmitter received the transmission of your electronically filed return on its host system. Free tax preparation 2012 The date and time in your time zone controls whether your electronically filed return is timely. Free tax preparation 2012 Filing late. Free tax preparation 2012   If you do not file your return by the due date, you may have to pay a failure-to-file penalty and interest. Free tax preparation 2012 For more information, see Penalties , later. Free tax preparation 2012 Also see Interest under Amount You Owe. Free tax preparation 2012   If you were due a refund but you did not file a return, you generally must file within 3 years from the date the return was due (including extensions) to get that refund. Free tax preparation 2012 Nonresident alien. Free tax preparation 2012    If you are a nonresident alien and earn wages subject to U. Free tax preparation 2012 S. Free tax preparation 2012 income tax withholding, your 2013 U. Free tax preparation 2012 S. Free tax preparation 2012 income tax return (Form 1040NR or Form 1040NR-EZ) is due by: April 15, 2014, if you use a calendar year, or The 15th day of the 4th month after the end of your fiscal year if you use a fiscal year. Free tax preparation 2012   If you do not earn wages subject to U. Free tax preparation 2012 S. Free tax preparation 2012 income tax withholding, your return is due by: June 16, 2014, if you use a calendar year, or The 15th day of the 6th month after the end of your fiscal year, if you use a fiscal year. Free tax preparation 2012 See Publication 519 for more filing information. Free tax preparation 2012 Filing for a decedent. Free tax preparation 2012   If you must file a final income tax return for a taxpayer who died during the year (a decedent), the return is due by the 15th day of the 4th month after the end of the decedent's normal tax year. Free tax preparation 2012 See Publication 559. Free tax preparation 2012 Extensions of Time To File You may be able to get an extension of time to file your return. Free tax preparation 2012 There are three types of situations where you may qualify for an extension: Automatic extensions, You are outside the United States, or You are serving in a combat zone. Free tax preparation 2012 Automatic Extension If you cannot file your 2013 return by the due date, you may be able to get an automatic 6-month extension of time to file. Free tax preparation 2012 Example. Free tax preparation 2012 If your return is due on April 15, 2014, you will have until October 15, 2014, to file. Free tax preparation 2012 If you do not pay the tax due by the regular due date (generally, April 15), you will owe interest. Free tax preparation 2012 You may also be charged penalties, discussed later. Free tax preparation 2012 How to get the automatic extension. Free tax preparation 2012   You can get the automatic extension by: Using IRS e-file (electronic filing), or Filing a paper form. Free tax preparation 2012 E-file options. Free tax preparation 2012   There are two ways you can use e-file to get an extension of time to file. Free tax preparation 2012 Complete Form 4868, Application for Automatic Extension of Time To File U. Free tax preparation 2012 S. Free tax preparation 2012 Individual Income Tax Return, to use as a worksheet. Free tax preparation 2012 If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. Free tax preparation 2012 If you e-file Form 4868 to the IRS, do not also send a paper Form 4868. Free tax preparation 2012 E-file using your personal computer or a tax professional. Free tax preparation 2012    You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. Free tax preparation 2012 You will need to provide certain information from your tax return for 2012. Free tax preparation 2012 If you wish to make a payment by direct transfer from your bank account, see Pay online , under How To Pay, later in this chapter. Free tax preparation 2012 E-file and pay by credit or debit card or by direct transfer from your bank account. Free tax preparation 2012   You can get an extension by paying part or all of your estimate of tax due by using a credit or debit card or by direct transfer from your bank account. Free tax preparation 2012 You can do this by phone or over the Internet. Free tax preparation 2012 You do not file Form 4868. Free tax preparation 2012 See Pay online , under How To Pay, later in this chapter. Free tax preparation 2012 Filing a paper Form 4868. Free tax preparation 2012   You can get an extension of time to file by filing a paper Form 4868. Free tax preparation 2012 Mail it to the address shown in the form instructions. Free tax preparation 2012   If you want to make a payment with the form, make your check or money order payable to “United States Treasury. Free tax preparation 2012 ” Write your SSN, daytime phone number, and “2013 Form 4868” on your check or money order. Free tax preparation 2012 When to file. Free tax preparation 2012   You must request the automatic extension by the due date for your return. Free tax preparation 2012 You can file your return any time before the 6-month extension period ends. Free tax preparation 2012 When you file your return. Free tax preparation 2012   Enter any payment you made related to the extension of time to file on Form 1040, line 68. Free tax preparation 2012 If you file Form 1040EZ or Form 1040A, include that payment in your total payments on Form 1040EZ, line 9, or Form 1040A, line 41. Free tax preparation 2012 Also enter “Form 4868” and the amount paid in the space to the left of line 9 or line 41. Free tax preparation 2012 Individuals Outside the United States You are allowed an automatic 2-month extension, without filing Form 4868, (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen or resident, and On the due date of your return: You are living outside the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and  Puerto Rico. Free tax preparation 2012 However, if you pay the tax due after the regular due date (generally, April 15), interest will be charged from that date until the date the tax is paid. Free tax preparation 2012 If you served in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. Free tax preparation 2012 See Individuals Serving in Combat Zone , later, for special rules that apply to you. Free tax preparation 2012 Married taxpayers. Free tax preparation 2012   If you file a joint return, only one spouse has to qualify for this automatic extension. Free tax preparation 2012 If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. Free tax preparation 2012 How to get the extension. Free tax preparation 2012   To use this automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. Free tax preparation 2012 (See the situations listed under (2), earlier. Free tax preparation 2012 ) Extensions beyond 2 months. Free tax preparation 2012   If you cannot file your return within the automatic 2-month extension period, you may be able to get an additional 4-month extension, for a total of 6 months. Free tax preparation 2012 File Form 4868 and check the box on line 8. Free tax preparation 2012 No further extension. Free tax preparation 2012   An extension of more than 6 months will generally not be granted. Free tax preparation 2012 However, if you are outside the United States and meet certain tests, you may be granted a longer extension. Free tax preparation 2012 For more information, see When To File and Pay in Publication 54. Free tax preparation 2012 Individuals Serving in Combat Zone The deadline for filing your tax return, paying any tax you may owe, and filing a claim for refund is automatically extended if you serve in a combat zone. Free tax preparation 2012 This applies to members of the Armed Forces, as well as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilians under the direction of the Armed Forces in support of the Armed Forces. Free tax preparation 2012 Combat zone. Free tax preparation 2012   For purposes of the automatic extension, the term “combat zone” includes the following areas. Free tax preparation 2012 The Arabian peninsula area, effective January 17, 1991. Free tax preparation 2012 The Kosovo area, effective March 24, 1999. Free tax preparation 2012 Afghanistan area, effective September 19, 2001. Free tax preparation 2012   See Publication 3, Armed Forces' Tax Guide, for more detailed information on the locations comprising each combat zone. Free tax preparation 2012 The publication also has information about other tax benefits available to military personnel serving in a combat zone. Free tax preparation 2012 Extension period. Free tax preparation 2012   The deadline for filing your return, paying any tax due, and filing a claim for refund is extended for at least 180 days after the later of: The last day you are in a combat zone or the last day the area qualifies as a combat zone, or The last day of any continuous qualified hospitalization for injury from service in the combat zone. Free tax preparation 2012   In addition to the 180 days, your deadline is also extended by the number of days you had left to take action with the IRS when you entered the combat zone. Free tax preparation 2012 For example, you have 3½ months (January 1 – April 15) to file your tax return. Free tax preparation 2012 Any days left in this period when you entered the combat zone (or the entire 3½ months if you entered it before the beginning of the year) are added to the 180 days. Free tax preparation 2012 See Extension of Deadlines in Publication 3 for more information. Free tax preparation 2012   The rules on the extension for filing your return also apply when you are deployed outside the United States (away from your permanent duty station) while participating in a designated contingency operation. Free tax preparation 2012 How Do I Prepare My Return? This section explains how to get ready to fill in your tax return and when to report your income and expenses. Free tax preparation 2012 It also explains how to complete certain sections of the form. Free tax preparation 2012 You may find Table 1-6 helpful when you prepare your paper return. Free tax preparation 2012 Table 1-6. Free tax preparation 2012 Six Steps for Preparing Your Paper Return 1 — Get your records together for income and expenses. Free tax preparation 2012 2 — Get the forms, schedules, and publications you need. Free tax preparation 2012 3 — Fill in your return. Free tax preparation 2012 4 — Check your return to make sure it is correct. Free tax preparation 2012 5 — Sign and date your return. Free tax preparation 2012 6 — Attach all required forms and schedules. Free tax preparation 2012 Electronic returns. Free tax preparation 2012   For information you may find useful in preparing a paperless return, see Does My Return Have To Be on Paper , earlier. Free tax preparation 2012 Substitute tax forms. Free tax preparation 2012   You cannot use your own version of a tax form unless it meets the requirements explained in Publication 1167, General Rules and Specifications for Substitute Forms and Schedules. Free tax preparation 2012 Form W-2. Free tax preparation 2012   If you were an employee, you should receive Form W-2 from your employer. Free tax preparation 2012 You will need the information from this form to prepare your return. Free tax preparation 2012 See Form W-2 under Credit for Withholding and Estimated Tax in chapter 4. Free tax preparation 2012   Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Free tax preparation 2012 If it is mailed, you should allow adequate time to receive it before contacting your employer. Free tax preparation 2012 If you still do not get the form by February 15, the IRS can help you by requesting the form from your employer. Free tax preparation 2012 When you request IRS help, be prepared to provide the following information. Free tax preparation 2012 Your name, address (including ZIP code), and phone number. Free tax preparation 2012 Your SSN. Free tax preparation 2012 Your dates of employment. Free tax preparation 2012 Your employer's name, address (including ZIP code), and phone number. Free tax preparation 2012 Form 1099. Free tax preparation 2012   If you received certain types of income, you may receive a Form 1099. Free tax preparation 2012 For example, if you received taxable interest of $10 or more, the payer is required to provide or send Form 1099 to you no later than January 31, 2014 (or by February 18, 2014, if furnished by a broker). Free tax preparation 2012 If it is mailed, you should allow adequate time to receive it before contacting the payer. Free tax preparation 2012 If you still do not get the form by February 18 (or by March 5, 2014, if furnished by a broker), call the IRS for help. Free tax preparation 2012 When Do I Report My Income and Expenses? You must figure your taxable income on the basis of a tax year. Free tax preparation 2012 A “tax year” is an annual accounting period used for keeping records and reporting income and expenses. Free tax preparation 2012 You must account for your income and expenses in a way that clearly shows your taxable income. Free tax preparation 2012 The way you do this is called an accounting method. Free tax preparation 2012 This section explains which accounting periods and methods you can use. Free tax preparation 2012 Accounting Periods Most individual tax returns cover a calendar year—the 12 months from January 1 through December 31. Free tax preparation 2012 If you do not use a calendar year, your accounting period is a fiscal year. Free tax preparation 2012 A regular fiscal year is a 12-month period that ends on the last day of any month except December. Free tax preparation 2012 A 52-53-week fiscal year varies from 52 to 53 weeks and always ends on the same day of the week. Free tax preparation 2012 You choose your accounting period (tax year) when you file your first income tax return. Free tax preparation 2012 It cannot be longer than 12 months. Free tax preparation 2012 More information. Free tax preparation 2012   For more information on accounting periods, including how to change your accounting period, see Publication 538, Accounting Periods and Methods. Free tax preparation 2012 Accounting Methods Your accounting method is the way you account for your income and expenses. Free tax preparation 2012 Most taxpayers use either the cash method or an accrual method. Free tax preparation 2012 You choose a method when you file your first income tax return. Free tax preparation 2012 If you want to change your accounting method after that, you generally must get IRS approval. Free tax preparation 2012 Cash method. Free tax preparation 2012   If you use this method, report all items of income in the year in which you actually or constructively receive them. Free tax preparation 2012 Generally, you deduct all expenses in the year you actually pay them. Free tax preparation 2012 This is the method most individual taxpayers use. Free tax preparation 2012 Constructive receipt. Free tax preparation 2012   Generally, you constructively receive income when it is credited to your account or set apart in any way that makes it available to you. Free tax preparation 2012 You do not need to have physical possession of it. Free tax preparation 2012 For example, interest credited to your bank account on December 31, 2013, is taxable income to you in 2013 if you could have withdrawn it in 2013 (even if the amount is not entered in your records or withdrawn until 2014). Free tax preparation 2012 Garnisheed wages. Free tax preparation 2012   If your employer uses your wages to pay your debts, or if your wages are attached or garnisheed, the full amount is constructively received by you. Free tax preparation 2012 You must include these wages in income for the year you would have received them. Free tax preparation 2012 Debts paid for you. Free tax preparation 2012   If another person cancels or pays your debts (but not as a gift or loan), you have constructively received the amount and generally must include it in your gross income for the year. Free tax preparation 2012 See Canceled Debts in chapter 12 for more information. Free tax preparation 2012 Payment to third party. Free tax preparation 2012   If a third party is paid income from property you own, you have constructively received the income. Free tax preparation 2012 It is the same as if you had actually received the income and paid it to the third party. Free tax preparation 2012 Payment to an agent. Free tax preparation 2012   Income an agent receives for you is income you constructively received in the year the agent receives it. Free tax preparation 2012 If you indicate in a contract that your income is to be paid to another person, you must include the amount in your gross income when the other person receives it. Free tax preparation 2012 Check received or available. Free tax preparation 2012   A valid check that was made available to you before the end of the tax year is constructively received by you in that year. Free tax preparation 2012 A check that was “made available to you” includes a check you have already received, but not cashed or deposited. Free tax preparation 2012 It also includes, for example, your last paycheck of the year that your employer made available for you to pick up at the office before the end of the year. Free tax preparation 2012 It is constructively received by you in that year whether or not you pick it up before the end of the year or wait to receive it by mail after the end of the year. Free tax preparation 2012 No constructive receipt. Free tax preparation 2012   There may be facts to show that you did not constructively receive income. Free tax preparation 2012 Example. Free tax preparation 2012 Alice Johnson, a teacher, agreed to her school board's condition that, in her absence, she would receive only the difference between her regular salary and the salary of a substitute teacher hired by the school board. Free tax preparation 2012 Therefore, Alice did not constructively receive the amount by which her salary was reduced to pay the substitute teacher. Free tax preparation 2012 Accrual method. Free tax preparation 2012   If you use an accrual method, you generally report income when you earn it, rather than when you receive it. Free tax preparation 2012 You generally deduct your expenses when you incur them, rather than when you pay them. Free tax preparation 2012 Income paid in advance. Free tax preparation 2012   An advance payment of income is generally included in gross income in the year you receive it. Free tax preparation 2012 Your method of accounting does not matter as long as the income is available to you. Free tax preparation 2012 An advance payment may include rent or interest you receive in advance and pay for services you will perform later. Free tax preparation 2012   A limited deferral until the next tax year may be allowed for certain advance payments. Free tax preparation 2012 See Publication 538 for specific information. Free tax preparation 2012 Additional information. Free tax preparation 2012   For more information on accounting methods, including how to change your accounting method, see Publication 538. Free tax preparation 2012 Social Security Number (SSN) You must enter your SSN on your return. Free tax preparation 2012 If you are married, enter the SSNs for both you and your spouse, whether you file jointly or separately. Free tax preparation 2012 If you are filing a joint return, include the SSNs in the same order as the names. Free tax preparation 2012 Use this same order in submitting other forms and documents to the IRS. Free tax preparation 2012 Check that both the name and SSN on your Form 1040, W-2, and 1099 agree with your social security card. Free tax preparation 2012 If they do not, certain deductions and credits on your Form 1040 may be reduced or disallowed and you may not receive credit for your social security earnings. Free tax preparation 2012 If your Form W-2 shows an incorrect SSN or name, notify your employer or the form-issuing agent as soon as possible to make sure your earnings are credited to your social security record. Free tax preparation 2012 If the name or SSN on your social security card is incorrect, call the SSA at 1-800-772-1213. Free tax preparation 2012 Name change. Free tax preparation 2012   If you changed your name because of marriage, divorce, etc. Free tax preparation 2012 , be sure to report the change to your local Social Security Administration (SSA) office before filing your return. Free tax preparation 2012 This prevents delays in processing your return and issuing refunds. Free tax preparation 2012 It also safeguards your future social security benefits. Free tax preparation 2012 Dependent's SSN. Free tax preparation 2012   You must provide the SSN of each dependent you claim, regardless of the dependent's age. Free tax preparation 2012 This requirement applies to all dependents (not just your children) claimed on your tax return. Free tax preparation 2012 Exception. Free tax preparation 2012    If your child was born and died in 2013 and did not have an SSN, enter “DIED” in column (2) of line 6c (Form 1040 or 1040A) and include a copy of the child's birth certificate, death certificate, or hospital records. Free tax preparation 2012 The document must show that the child was born alive. Free tax preparation 2012 No SSN. Free tax preparation 2012   File Form SS-5, Application for a Social Security Card, with your local SSA office to get an SSN for yourself or your dependent. Free tax preparation 2012 It usually takes about 2 weeks to get an SSN. Free tax preparation 2012 If you or your dependent is not eligible for an SSN, see Individual taxpayer identification number (ITIN) , later. Free tax preparation 2012   If you are a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen or resident alien, you must show proof of age, identity, and citizenship or alien status with your Form SS-5. Free tax preparation 2012 If you are 12 or older and have never been assigned an SSN, you must appear in person with this proof at an SSA office. Free tax preparation 2012   Form SS-5 is available at any SSA office, on the Internet at www. Free tax preparation 2012 socialsecurity. Free tax preparation 2012 gov, or by calling 1-800-772-1213. Free tax preparation 2012 If you have any questions about which documents you can use as proof of age, identity, or citizenship, contact your SSA office. Free tax preparation 2012   If your dependent does not have an SSN by the time your return is due, you may want to ask for an extension of time to file, as explained earlier under When Do I Have To File . Free tax preparation 2012   If you do not provide a required SSN or if you provide an incorrect SSN, your tax may be increased and any refund may be reduced. Free tax preparation 2012 Adoption taxpayer identification number (ATIN). Free tax preparation 2012   If you are in the process of adopting a child who is a U. Free tax preparation 2012 S. Free tax preparation 2012 citizen or resident and cannot get an SSN for the child until the adoption is final, you can apply for an ATIN to use instead of an SSN. Free tax preparation 2012    File Form W-7A, Application for Taxpayer Identification Number for Pending U. Free tax preparation 2012 S. Free tax preparation 2012 Adoptions, with the IRS to get an ATIN if all of the following are true. Free tax preparation 2012 You have a child living with you who was placed in your home for legal adoption. Free tax preparation 2012 You cannot get the child's existing SSN even though you have made a reasonable attempt to get it from the birth parents, the placement agency, and other persons. Free tax preparation 2012 You cannot get an SSN for the child from the SSA because, for example, the adoption is not final. Free tax preparation 2012 You are eligible to claim the child as a dependent on your tax return. Free tax preparation 2012 After the adoption is final, you must apply for an SSN for the child. Free tax preparation 2012 You cannot continue using the ATIN. Free tax preparation 2012   See Form W-7A for more information. Free tax preparation 2012 Nonresident alien spouse. Free tax preparation 2012   If your spouse is a nonresident alien, your spouse must have either an SSN or an ITIN if: You file a joint return, You file a separate return and claim an exemption for your spouse, or Your spouse is filing a separate return. Free tax preparation 2012 If your spouse is not eligible for an SSN, see the following discussion on ITINs. Free tax preparation 2012 Individual taxpayer identification number (ITIN). Free tax preparation 2012   The IRS will issue you an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. Free tax preparation 2012 This also applies to an alien spouse or dependent. Free tax preparation 2012 To apply for an ITIN, file Form W-7 with the IRS. Free tax preparation 2012 It usually takes about 6 to 10 weeks to get an ITIN. Free tax preparation 2012 Enter the ITIN on your tax return wherever an SSN is requested. Free tax preparation 2012    If you are applying for an ITIN for yourself, your spouse, or a dependent in order to file your tax return, attach your completed tax return to your Form W-7. Free tax preparation 2012 See the Form W-7 instructions for how and where to file. Free tax preparation 2012 You cannot e-file a return using an ITIN in the calendar year the ITIN is issued; however, you can e-file returns in the following years. Free tax preparation 2012 ITIN for tax use only. Free tax preparation 2012   An ITIN is for tax use only. Free tax preparation 2012 It does not entitle you or your dependent to social security benefits or change the employment or immigration status of either of you under U. Free tax preparation 2012 S. Free tax preparation 2012 law. Free tax preparation 2012 Penalty for not providing social security number. Free tax preparation 2012   If you do not include your SSN or the SSN of your spouse or dependent as required, you may have to pay a penalty. Free tax preparation 2012 See the discussion on Penalties , later, for more information. Free tax preparation 2012 SSN on correspondence. Free tax preparation 2012   If you write to the IRS about your tax account, be sure to include your SSN (and the name and SSN of your spouse, if you filed a joint return) in your correspondence. Free tax preparation 2012 Because your SSN is used to identify your account, this helps the IRS respond to your correspondence promptly. Free tax preparation 2012 Presidential Election Campaign Fund This fund helps pay for Presidential election campaigns. Free tax preparation 2012 If you want $3 to go to this fund, check the box. Free tax preparation 2012 If you are filing a joint return, your spouse can also have $3 go to the fund. Free tax preparation 2012 If you check a box, your tax or refund will not change. Free tax preparation 2012 Computations The following information may be useful in making the return easier to complete. Free tax preparation 2012 Rounding off dollars. Free tax preparation 2012   You can round off cents to whole dollars on your return and schedules. Free tax preparation 2012 If you do round to whole dollars, you must round all amounts. Free tax preparation 2012 To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. Free tax preparation 2012 For example, $1. Free tax preparation 2012 39 becomes $1 and $2. Free tax preparation 2012 50 becomes $3. Free tax preparation 2012   If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total. Free tax preparation 2012 Example. Free tax preparation 2012 You receive two Forms W-2: one showing wages of $5,000. Free tax preparation 2012 55 and one showing wages of $18,500. Free tax preparation 2012 73. Free tax preparation 2012 On Form 1040, line 7, you would enter $23,501 ($5,000. Free tax preparation 2012 55 + $18,500. Free tax preparation 2012 73 = $23,501. Free tax preparation 2012 28), not $23,502 ($5,001 + $18,501). Free tax preparation 2012 Equal amounts. Free tax preparation 2012   If you are asked to enter the smaller or larger of two equal amounts, enter that amount. Free tax preparation 2012 Example. Free tax preparation 2012 Line 1 is $500. Free tax preparation 2012 Line 3 is $500. Free tax preparation 2012 Line 5 asks you to enter the smaller of line 1 or 3. Free tax preparation 2012 Enter $500 on line 5. Free tax preparation 2012 Negative amounts. Free tax preparation 2012   If you file a paper return and you need to enter a negative amount, put the amount in parentheses rather than using a minus sign. Free tax preparation 2012 To combine positive and negative amounts, add all the positive amounts together and then subtract the negative amounts. Free tax preparation 2012 Attachments Depending on the form you file and the items reported on your return, you may have to complete additional schedules and forms and attach them to your paper return. Free tax preparation 2012 You may be able to file a paperless return using IRS e-file. Free tax preparation 2012 There's nothing to attach or mail, not even your Forms W-2. Free tax preparation 2012 See Does My Return Have To Be on Paper, earlier. Free tax preparation 2012 Form W-2. Free tax preparation 2012   Form W-2 is a statement from your employer of wages and other compensation paid to you and taxes withheld from your pay. Free tax preparation 2012 You should have a Form W-2 from each employer. Free tax preparation 2012 If you file a paper return, be sure to attach a copy of Form W-2 in the place indicated on the front page of your return. Free tax preparation 2012 Attach it to the front page of your paper return, not to any attachments. Free tax preparation 2012 For more information, see Form W-2 in chapter 4. Free tax preparation 2012   If you received a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Free tax preparation 2012 , showing federal income tax withheld, and you file a paper return, attach a copy of that form in the place indicated on the front page of your return. Free tax preparation 2012 Form 1040EZ. Free tax preparation 2012   There are no additional schedules to file with Form 1040EZ. Free tax preparation 2012 Form 1040A. Free tax preparation 2012   If you file a paper return, attach any forms and schedules behind Form 1040A in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Free tax preparation 2012 Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Free tax preparation 2012 Do not attach items unless required to do so. Free tax preparation 2012 Form 1040. Free tax preparation 2012   If you file a paper return, attach any forms and schedules behind Form 1040 in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Free tax preparation 2012 Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Free tax preparation 2012 Do not attach items unless required to do so. Free tax preparation 2012 Third Party Designee You can authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. Free tax preparation 2012 If you check the “Yes” box in the Third party designee area of your 2013 tax return and provide the information required, you are authorizing: The IRS to call the designee to answer any questions that arise during the processing of your return, and The designee to: Give information that is missing from your return to the IRS, Call the IRS for information about th
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The Free Tax Preparation 2012

Free tax preparation 2012 22. Free tax preparation 2012   Taxes Table of Contents IntroductionIndian tribal government. Free tax preparation 2012 Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. Free tax preparation 2012 Real Estate TaxesReal estate taxes for prior years. Free tax preparation 2012 Examples. Free tax preparation 2012 Form 1099-S. Free tax preparation 2012 Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). Free tax preparation 2012 It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. Free tax preparation 2012 This chapter covers the following topics. Free tax preparation 2012 Income taxes (federal, state, local, and foreign). Free tax preparation 2012 General sales taxes (state and local). Free tax preparation 2012 Real estate taxes (state, local, and foreign). Free tax preparation 2012 Personal property taxes (state and local). Free tax preparation 2012 Taxes and fees you cannot deduct. Free tax preparation 2012 Use Table 22-1 as a guide to determine which taxes you can deduct. Free tax preparation 2012 The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. Free tax preparation 2012 Business taxes. Free tax preparation 2012   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. Free tax preparation 2012 For information on these taxes, see Publication 535, Business Expenses. Free tax preparation 2012 State or local taxes. Free tax preparation 2012   These are taxes imposed by the 50 states, U. Free tax preparation 2012 S. Free tax preparation 2012 possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. Free tax preparation 2012 Indian tribal government. Free tax preparation 2012   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. Free tax preparation 2012 Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. Free tax preparation 2012 General sales taxes. Free tax preparation 2012   These are taxes imposed at one rate on retail sales of a broad range of classes of items. Free tax preparation 2012 Foreign taxes. Free tax preparation 2012   These are taxes imposed by a foreign country or any of its political subdivisions. Free tax preparation 2012 Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. Free tax preparation 2012 The tax must be imposed on you. Free tax preparation 2012 You must pay the tax during your tax year. Free tax preparation 2012 The tax must be imposed on you. Free tax preparation 2012   In general, you can deduct only taxes imposed on you. Free tax preparation 2012   Generally, you can deduct property taxes only if you are an owner of the property. Free tax preparation 2012 If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. Free tax preparation 2012 You must pay the tax during your tax year. Free tax preparation 2012   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. Free tax preparation 2012 If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. Free tax preparation 2012 If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. Free tax preparation 2012 If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). Free tax preparation 2012 See Publication 538, Accounting Periods and Methods, for details. Free tax preparation 2012    If you use an accrual method of accounting, see Publication 538 for more information. Free tax preparation 2012 Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. Free tax preparation 2012 State and Local Income Taxes You can deduct state and local income taxes. Free tax preparation 2012 However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. Free tax preparation 2012 See General Sales Taxes , later. Free tax preparation 2012 Exception. Free tax preparation 2012    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. Free tax preparation 2012 For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. Free tax preparation 2012 What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. Free tax preparation 2012 Withheld taxes. Free tax preparation 2012   You can deduct state and local income taxes withheld from your salary in the year they are withheld. Free tax preparation 2012 Your Form(s) W-2 will show these amounts. Free tax preparation 2012 Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. Free tax preparation 2012 Estimated tax payments. Free tax preparation 2012   You can deduct estimated tax payments you made during the year to a state or local government. Free tax preparation 2012 However, you must have a reasonable basis for making the estimated tax payments. Free tax preparation 2012 Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. Free tax preparation 2012 For example, you made an estimated state income tax payment. Free tax preparation 2012 However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. Free tax preparation 2012 You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. Free tax preparation 2012 Refund applied to taxes. Free tax preparation 2012   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. Free tax preparation 2012    Do not reduce your deduction by either of the following items. Free tax preparation 2012 Any state or local income tax refund (or credit) you expect to receive for 2013. Free tax preparation 2012 Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. Free tax preparation 2012   However, part or all of this refund (or credit) may be taxable. Free tax preparation 2012 See Refund (or credit) of state or local income taxes , later. Free tax preparation 2012 Separate federal returns. Free tax preparation 2012   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. Free tax preparation 2012 Joint state and local returns. Free tax preparation 2012   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. Free tax preparation 2012 You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. Free tax preparation 2012 However, you cannot deduct more than the amount you actually paid during the year. Free tax preparation 2012 You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. Free tax preparation 2012 If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. Free tax preparation 2012 Joint federal return. Free tax preparation 2012   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. Free tax preparation 2012 Contributions to state benefit funds. Free tax preparation 2012    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. Free tax preparation 2012 For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. Free tax preparation 2012 Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. Free tax preparation 2012 Alaska Unemployment Compensation Fund. Free tax preparation 2012 California Nonoccupational Disability Benefit Fund. Free tax preparation 2012 New Jersey Nonoccupational Disability Benefit Fund. Free tax preparation 2012 New Jersey Unemployment Compensation Fund. Free tax preparation 2012 New York Nonoccupational Disability Benefit Fund. Free tax preparation 2012 Pennsylvania Unemployment Compensation Fund. Free tax preparation 2012 Rhode Island Temporary Disability Benefit Fund. Free tax preparation 2012 Washington State Supplemental Workmen's Compensation Fund. Free tax preparation 2012    Employee contributions to private or voluntary disability plans are not deductible. Free tax preparation 2012 Refund (or credit) of state or local income taxes. Free tax preparation 2012   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. Free tax preparation 2012 This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. Free tax preparation 2012 If you did not itemize your deductions in the previous year, do not include the refund in income. Free tax preparation 2012 If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. Free tax preparation 2012 For a discussion of how much to include, see Recoveries in chapter 12. Free tax preparation 2012 Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Free tax preparation 2012 S. Free tax preparation 2012 possession. Free tax preparation 2012 However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Free tax preparation 2012 S. Free tax preparation 2012 tax under the foreign earned income exclusion or the foreign housing exclusion. Free tax preparation 2012 For information on these exclusions, see Publication 54, Tax Guide for U. Free tax preparation 2012 S. Free tax preparation 2012 Citizens and Resident Aliens Abroad. Free tax preparation 2012 For information on the foreign tax credit, see Publication 514. Free tax preparation 2012 General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. Free tax preparation 2012 You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. Free tax preparation 2012 Actual expenses. Free tax preparation 2012   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. Free tax preparation 2012 However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Free tax preparation 2012 If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Free tax preparation 2012 If you use the actual expenses method, you must have receipts to show the general sales taxes paid. Free tax preparation 2012 Do not include sales taxes paid on items used in your trade or business. Free tax preparation 2012 Motor vehicles. Free tax preparation 2012   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Free tax preparation 2012 This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. Free tax preparation 2012 Optional sales tax tables. Free tax preparation 2012   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). Free tax preparation 2012 You may also be able to add the state and local general sales taxes paid on certain specified items. Free tax preparation 2012   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. Free tax preparation 2012 Your income is your adjusted gross income plus any nontaxable items such as the following. Free tax preparation 2012 Tax-exempt interest. Free tax preparation 2012 Veterans' benefits. Free tax preparation 2012 Nontaxable combat pay. Free tax preparation 2012 Workers' compensation. Free tax preparation 2012 Nontaxable part of social security and railroad retirement benefits. Free tax preparation 2012 Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. Free tax preparation 2012 Public assistance payments. Free tax preparation 2012 If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. Free tax preparation 2012 See the Instructions for Schedule A (Form 1040), line 5, for details. Free tax preparation 2012 Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. Free tax preparation 2012 You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. Free tax preparation 2012 Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Free tax preparation 2012 They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. Free tax preparation 2012 For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. Free tax preparation 2012 Tenant-shareholders in a cooperative housing corporation. Free tax preparation 2012   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. Free tax preparation 2012 The corporation should provide you with a statement showing your share of the taxes. Free tax preparation 2012 For more information, see Special Rules for Cooperatives in Publication 530. Free tax preparation 2012 Division of real estate taxes between buyers and sellers. Free tax preparation 2012   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. Free tax preparation 2012   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. Free tax preparation 2012 The seller is treated as paying the taxes up to, but not including, the date of sale. Free tax preparation 2012 The buyer is treated as paying the taxes beginning with the date of sale. Free tax preparation 2012 This applies regardless of the lien dates under local law. Free tax preparation 2012 Generally, this information is included on the settlement statement provided at the closing. Free tax preparation 2012    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. Free tax preparation 2012 This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. Free tax preparation 2012 However, you must also include the amount of that tax in the selling price of the property. Free tax preparation 2012 The buyer must include the same amount in his or her cost of the property. Free tax preparation 2012   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. Free tax preparation 2012 Worksheet 22-1. Free tax preparation 2012 Figuring Your Real Estate Tax Deduction 1. Free tax preparation 2012 Enter the total real estate taxes for the real property tax year   2. Free tax preparation 2012 Enter the number of days in the real property tax year that you owned the property   3. Free tax preparation 2012 Divide line 2 by 365 (for leap years, divide line 2 by 366) . Free tax preparation 2012 4. Free tax preparation 2012 Multiply line 1 by line 3. Free tax preparation 2012 This is your deduction. Free tax preparation 2012 Enter it on Schedule A (Form 1040), line 6   Note. Free tax preparation 2012 Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. Free tax preparation 2012 Your total deduction is the sum of the line 4 amounts for all of the properties. Free tax preparation 2012 Real estate taxes for prior years. Free tax preparation 2012   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. Free tax preparation 2012 Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. Free tax preparation 2012 The buyer must add them to the cost of the property. Free tax preparation 2012 The seller can deduct these taxes paid by the buyer. Free tax preparation 2012 However, the seller must include them in the selling price. Free tax preparation 2012 Examples. Free tax preparation 2012   The following examples illustrate how real estate taxes are divided between buyer and seller. Free tax preparation 2012 Example 1. Free tax preparation 2012 Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. Free tax preparation 2012 The tax on their old home, sold on May 7, was $620. Free tax preparation 2012 The tax on their new home, bought on May 3, was $732. Free tax preparation 2012 Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. Free tax preparation 2012 On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. Free tax preparation 2012 Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). Free tax preparation 2012 They figure their deduction for taxes on their old home as follows. Free tax preparation 2012 Worksheet 22-1. Free tax preparation 2012 Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. Free tax preparation 2012 Enter the total real estate taxes for the real property tax year $620 2. Free tax preparation 2012 Enter the number of days in the real property tax year that you owned the property 126 3. Free tax preparation 2012 Divide line 2 by 365 (for leap years, divide line 2 by 366) . Free tax preparation 2012 3452 4. Free tax preparation 2012 Multiply line 1 by line 3. Free tax preparation 2012 This is your deduction. Free tax preparation 2012 Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. Free tax preparation 2012 (The buyers add the $214 to their cost of the home. Free tax preparation 2012 ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). Free tax preparation 2012 They figure their deduction for taxes on their new home as follows. Free tax preparation 2012 Worksheet 22-1. Free tax preparation 2012 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Free tax preparation 2012 Enter the total real estate taxes for the real property tax year $732 2. Free tax preparation 2012 Enter the number of days in the real property tax year that you owned the property 243 3. Free tax preparation 2012 Divide line 2 by 365 (for leap years, divide line 2 by 366) . Free tax preparation 2012 6658 4. Free tax preparation 2012 Multiply line 1 by line 3. Free tax preparation 2012 This is your deduction. Free tax preparation 2012 Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. Free tax preparation 2012 (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. Free tax preparation 2012 ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. Free tax preparation 2012 They will enter this amount on Schedule A (Form 1040), line 6. Free tax preparation 2012 Example 2. Free tax preparation 2012 George and Helen Brown bought a new home on May 3, 2013. Free tax preparation 2012 Their real property tax year for the new home is the calendar year. Free tax preparation 2012 Real estate taxes for 2012 were assessed in their state on January 1, 2013. Free tax preparation 2012 The taxes became due on May 31, 2013, and October 31, 2013. Free tax preparation 2012 The Browns agreed to pay all taxes due after the date of purchase. Free tax preparation 2012 Real estate taxes for 2012 were $680. Free tax preparation 2012 They paid $340 on May 31, 2013, and $340 on October 31, 2013. Free tax preparation 2012 These taxes were for the 2012 real property tax year. Free tax preparation 2012 The Browns cannot deduct them since they did not own the property until 2013. Free tax preparation 2012 Instead, they must add $680 to the cost of their new home. Free tax preparation 2012 In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. Free tax preparation 2012 The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). Free tax preparation 2012 They will figure their 2014 deduction for taxes as follows. Free tax preparation 2012 Worksheet 22-1. Free tax preparation 2012 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Free tax preparation 2012 Enter the total real estate taxes for the real property tax year $752 2. Free tax preparation 2012 Enter the number of days in the real property tax year that you owned the property 243 3. Free tax preparation 2012 Divide line 2 by 365 (for leap years, divide line 2 by 366) . Free tax preparation 2012 6658 4. Free tax preparation 2012 Multiply line 1 by line 3. Free tax preparation 2012 This is your deduction. Free tax preparation 2012 Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. Free tax preparation 2012 Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. Free tax preparation 2012 This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. Free tax preparation 2012 The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. Free tax preparation 2012 The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. Free tax preparation 2012 Form 1099-S. Free tax preparation 2012   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. Free tax preparation 2012 Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. Free tax preparation 2012 The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. Free tax preparation 2012   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. Free tax preparation 2012 The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. Free tax preparation 2012 See Refund (or rebate) , later. Free tax preparation 2012 Taxes placed in escrow. Free tax preparation 2012   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. Free tax preparation 2012 You can deduct only the real estate tax that the third party actually paid to the taxing authority. Free tax preparation 2012 If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. Free tax preparation 2012 Tenants by the entirety. Free tax preparation 2012   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. Free tax preparation 2012 Divorced individuals. Free tax preparation 2012   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. Free tax preparation 2012 See Taxes and insurance in chapter 18 for more information. Free tax preparation 2012 Ministers' and military housing allowances. Free tax preparation 2012   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. Free tax preparation 2012 Refund (or rebate). Free tax preparation 2012   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. Free tax preparation 2012 If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. Free tax preparation 2012 However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. Free tax preparation 2012 For more information, see Recoveries in chapter 12. Free tax preparation 2012 Table 22-1. Free tax preparation 2012 Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. Free tax preparation 2012 Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). Free tax preparation 2012     Fines and penalties. Free tax preparation 2012 Income Taxes State and local income taxes. Free tax preparation 2012 Federal income taxes. Free tax preparation 2012   Foreign income taxes. Free tax preparation 2012     Employee contributions to state funds listed under Contributions to state benefit funds . Free tax preparation 2012 Employee contributions to private or voluntary disability plans. Free tax preparation 2012     State and local general sales taxes if you choose to deduct state and local income taxes. Free tax preparation 2012 General Sales Taxes State and local general sales taxes, including compensating use taxes. Free tax preparation 2012 State and local income taxes if you choose to deduct state and local general sales taxes. Free tax preparation 2012 Other Taxes Taxes that are expenses of your trade or business. Free tax preparation 2012 Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. Free tax preparation 2012   Taxes on property producing rent or royalty income. Free tax preparation 2012 Per capita taxes. Free tax preparation 2012   Occupational taxes. Free tax preparation 2012 See chapter 28. Free tax preparation 2012     One-half of self-employment tax paid. Free tax preparation 2012   Personal Property Taxes State and local personal property taxes. Free tax preparation 2012 Customs duties that are not expenses of your trade or business or of producing income. Free tax preparation 2012 Real Estate Taxes State and local real estate taxes. Free tax preparation 2012 Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). Free tax preparation 2012   Foreign real estate taxes. Free tax preparation 2012 Taxes for local benefits (with exceptions). Free tax preparation 2012 See Real Estate-Related Items You Cannot Deduct . Free tax preparation 2012   Tenant's share of real estate taxes paid by  cooperative housing corporation. Free tax preparation 2012 Trash and garbage pickup fees (with exceptions). Free tax preparation 2012 See Real Estate-Related Items You Cannot Deduct . Free tax preparation 2012     Rent increase due to higher real estate taxes. Free tax preparation 2012     Homeowners' association charges. Free tax preparation 2012 Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. Free tax preparation 2012 Taxes for local benefits. Free tax preparation 2012 Itemized charges for services (such as trash and garbage pickup fees). Free tax preparation 2012 Transfer taxes (or stamp taxes). Free tax preparation 2012 Rent increases due to higher real estate taxes. Free tax preparation 2012 Homeowners' association charges. Free tax preparation 2012 Taxes for local benefits. Free tax preparation 2012   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. Free tax preparation 2012 These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. Free tax preparation 2012 You should increase the basis of your property by the amount of the assessment. Free tax preparation 2012   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. Free tax preparation 2012 If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. Free tax preparation 2012 If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. Free tax preparation 2012    Taxes for local benefits may be included in your real estate tax bill. Free tax preparation 2012 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Free tax preparation 2012 You should use the rules above to determine if the local benefit tax is deductible. Free tax preparation 2012 Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. Free tax preparation 2012 Itemized charges for services. Free tax preparation 2012    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. Free tax preparation 2012 For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). Free tax preparation 2012    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. Free tax preparation 2012 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Free tax preparation 2012 Exception. Free tax preparation 2012   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. Free tax preparation 2012 Transfer taxes (or stamp taxes). Free tax preparation 2012   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. Free tax preparation 2012 If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. Free tax preparation 2012 If paid by the buyer, they are included in the cost basis of the property. Free tax preparation 2012 Rent increase due to higher real estate taxes. Free tax preparation 2012   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. Free tax preparation 2012 Homeowners' association charges. Free tax preparation 2012   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. Free tax preparation 2012 Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. Free tax preparation 2012 A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. Free tax preparation 2012 For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. Free tax preparation 2012 If the tax is partly based on value and partly based on other criteria, it may qualify in part. Free tax preparation 2012 Example. Free tax preparation 2012 Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. Free tax preparation 2012 You paid $32 based on the value ($1,500) and weight (3,400 lbs. Free tax preparation 2012 ) of your car. Free tax preparation 2012 You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. Free tax preparation 2012 The remaining $17 ($. Free tax preparation 2012 50 × 34), based on the weight, is not deductible. Free tax preparation 2012 Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. Free tax preparation 2012 Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. Free tax preparation 2012 See Table 22-1. Free tax preparation 2012 Taxes and fees that are generally not deductible include the following items. Free tax preparation 2012 Employment taxes. Free tax preparation 2012 This includes social security, Medicare, and railroad retirement taxes withheld from your pay. Free tax preparation 2012 However, one-half of self-employment tax you pay is deductible. Free tax preparation 2012 In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. Free tax preparation 2012 For more information, see chapters 21 and 32. Free tax preparation 2012 Estate, inheritance, legacy, or succession taxes. Free tax preparation 2012 However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. Free tax preparation 2012 In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. Free tax preparation 2012 For more information, see Publication 559, Survivors, Executors, and Administrators. Free tax preparation 2012 Federal income taxes. Free tax preparation 2012 This includes income taxes withheld from your pay. Free tax preparation 2012 Fines and penalties. Free tax preparation 2012 You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. Free tax preparation 2012 Gift taxes. Free tax preparation 2012 License fees. Free tax preparation 2012 You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). Free tax preparation 2012 Per capita taxes. Free tax preparation 2012 You cannot deduct state or local per capita taxes. Free tax preparation 2012 Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. Free tax preparation 2012 For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. Free tax preparation 2012 Where To Deduct You deduct taxes on the following schedules. Free tax preparation 2012 State and local income taxes. Free tax preparation 2012    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. Free tax preparation 2012 Check box a on line 5. Free tax preparation 2012 General sales taxes. Free tax preparation 2012   Sales taxes are deducted on Schedule A (Form 1040), line 5. Free tax preparation 2012 You must check box b on line 5. Free tax preparation 2012 If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. Free tax preparation 2012 Foreign income taxes. Free tax preparation 2012   Generally, income taxes you pay to a foreign country or U. Free tax preparation 2012 S. Free tax preparation 2012 possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. Free tax preparation 2012 S. Free tax preparation 2012 income tax on Form 1040, line 47. Free tax preparation 2012 To claim the credit, you may have to complete and attach Form 1116. Free tax preparation 2012 For more information, see chapter 37, the Form 1040 instructions, or Publication 514. Free tax preparation 2012 Real estate taxes and personal property taxes. Free tax preparation 2012    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). Free tax preparation 2012 Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). Free tax preparation 2012 Self-employment tax. Free tax preparation 2012    Deduct one-half of your self-employment tax on Form 1040, line 27. Free tax preparation 2012 Other taxes. Free tax preparation 2012    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. 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