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H&r block file for free Publication 915 - Main Content Table of Contents Are Any of Your Benefits Taxable?Worksheet A. H&r block file for free Exemption from withholding. H&r block file for free How To Report Your Benefits How Much Is Taxable?Examples Lump-Sum ElectionExample Deductions Related to Your BenefitsRepayments More Than Gross Benefits Worksheets AppendixForm SSA-1099, Social Security Benefit Statement 2013 Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Form RRB-1099, Payments by the Railroad Retirement Board 2013 Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) How To Get Tax HelpLow Income Taxpayer Clinics Are Any of Your Benefits Taxable? To find out whether any of your benefits shown on Forms SSA-1099 and RRB-1099 may be taxable, compare the base amount (explained later) for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. H&r block file for free When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. H&r block file for free S. H&r block file for free savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. H&r block file for free Children's benefits. H&r block file for free   The rules in this publication apply to benefits received by children. H&r block file for free See Who is taxed , later. H&r block file for free The SSA issues Form SSA-1099 and Form SSA-1042S. H&r block file for free The RRB issues Form RRB-1099 and Form RRB-1042S. H&r block file for free These forms (tax statements) report the amounts paid and repaid, and taxes withheld for a tax year. H&r block file for free You may receive more than one of these forms for the same tax year. H&r block file for free See the Appendix at the end of this publication for more information. H&r block file for free Each original Form RRB-1099 or Form RRB-1042S is valid unless it has been corrected. H&r block file for free The RRB will issue a corrected Form RRB-1099 or Form RRB-1042S if there is an error in the original. H&r block file for free A corrected Form RRB-1099 or Form RRB-1042S is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099 or Form RRB-1042S. H&r block file for free You must use the latest corrected Form RRB-1099 or Form RRB-1042S you received and any original Form RRB-1099 or Form RRB-1042S that the RRB has not corrected when you determine what amounts to report on your tax return. H&r block file for free Figuring total income. H&r block file for free   To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. H&r block file for free If the total is more than your base amount, part of your benefits may be taxable. H&r block file for free   If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. H&r block file for free Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. H&r block file for free If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. H&r block file for free If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. H&r block file for free Base amount. H&r block file for free   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. H&r block file for free Worksheet A. H&r block file for free   You can use Worksheet A to figure the amount of income to compare with your base amount. H&r block file for free This is a quick way to check whether some of your benefits may be taxable. H&r block file for free     Worksheet A. H&r block file for free A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. H&r block file for free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. H&r block file for free Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. H&r block file for free (If you received more than one form, combine the amounts from box 5 and enter the total. H&r block file for free ) A. H&r block file for free   Note. H&r block file for free If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. H&r block file for free B. H&r block file for free Enter one-half of the amount on line A B. H&r block file for free   C. H&r block file for free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. H&r block file for free   D. H&r block file for free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. H&r block file for free   E. H&r block file for free Add lines B, C, and D E. H&r block file for free   Note. H&r block file for free Compare the amount on line E to your base amount for your filing status. H&r block file for free If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. H&r block file for free If the amount on line E is more than your base amount, some of your benefits may be taxable. H&r block file for free You need to complete Worksheet 1, shown later. H&r block file for free If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . H&r block file for free   Example. H&r block file for free You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. H&r block file for free In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. H&r block file for free Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. H&r block file for free You also received a taxable pension of $22,800 and interest income of $500. H&r block file for free You did not have any tax-exempt interest income. H&r block file for free Your benefits are not taxable for 2013 because your income, as figured in Worksheet A below, is not more than your base amount ($32,000) for married filing jointly. H&r block file for free   Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. H&r block file for free     Filled-in Worksheet A. H&r block file for free A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. H&r block file for free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. H&r block file for free Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. H&r block file for free (If you received more than one form, combine the amounts from box 5 and enter the total. H&r block file for free ) A. H&r block file for free $11,000 Note. H&r block file for free If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. H&r block file for free B. H&r block file for free Enter one-half of the amount on line A B. H&r block file for free 5,500 C. H&r block file for free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. H&r block file for free 23,300 D. H&r block file for free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. H&r block file for free -0- E. H&r block file for free Add lines B, C, and D E. H&r block file for free $28,800 Note. H&r block file for free Compare the amount on line E to your base amount for your filing status. H&r block file for free If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. H&r block file for free If the amount on line E is more than your base amount, some of your benefits may be taxable. H&r block file for free You need to complete Worksheet 1, shown later. H&r block file for free If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . H&r block file for free   Who is taxed. H&r block file for free   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. H&r block file for free For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. H&r block file for free One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. H&r block file for free Repayment of benefits. H&r block file for free   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. H&r block file for free It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. H&r block file for free If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. H&r block file for free   Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. H&r block file for free Your repayments are shown in box 4. H&r block file for free The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). H&r block file for free Use the amount in box 5 to figure whether any of your benefits are taxable. H&r block file for free Example. H&r block file for free In 2012, you received $3,000 in social security benefits, and in 2013 you received $2,700. H&r block file for free In March 2013, SSA notified you that you should have received only $2,500 in benefits in 2012. H&r block file for free During 2013, you repaid $500 to SSA. H&r block file for free The Form SSA-1099 you received for 2013 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). H&r block file for free The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500). H&r block file for free Tax withholding and estimated tax. H&r block file for free   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. H&r block file for free If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Statement. H&r block file for free   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. H&r block file for free For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. H&r block file for free U. H&r block file for free S. H&r block file for free citizens residing abroad. H&r block file for free   U. H&r block file for free S. H&r block file for free citizens who are residents of the following countries are exempt from U. H&r block file for free S. H&r block file for free tax on their benefits. H&r block file for free Canada. H&r block file for free Egypt. H&r block file for free Germany. H&r block file for free Ireland. H&r block file for free Israel. H&r block file for free Italy. H&r block file for free (You must also be a citizen of Italy for the exemption to apply. H&r block file for free ) Romania. H&r block file for free United Kingdom. H&r block file for free   The SSA will not withhold U. H&r block file for free S. H&r block file for free tax from your benefits if you are a U. H&r block file for free S. H&r block file for free citizen. H&r block file for free   The RRB will withhold U. H&r block file for free S. H&r block file for free tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the RRB to provide citizenship and residency information. H&r block file for free If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from your railroad retirement benefits at a 30% rate. H&r block file for free Contact the RRB to get this form. H&r block file for free Lawful permanent residents. H&r block file for free   For U. H&r block file for free S. H&r block file for free income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until their lawful permanent resident status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned. H&r block file for free Social security benefits paid to a green card holder are not subject to 30% withholding. H&r block file for free If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. H&r block file for free SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. H&r block file for free If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. H&r block file for free You must also attach the following information to your Form 1040 or 1040A: A copy of the Form SSA-1042S, Social Security Benefit Statement, A copy of the “green card,” and A signed declaration that includes the following statements:    “The SSA should not have withheld federal income tax from my social security benefits because I am a U. H&r block file for free S. H&r block file for free lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. H&r block file for free I am filing a U. H&r block file for free S. H&r block file for free income tax return for the tax year as a resident alien reporting all of my worldwide income. H&r block file for free I have not claimed benefits for the tax year under an income tax treaty as a nonresident alien. H&r block file for free ” Nonresident aliens. H&r block file for free   A nonresident alien is an individual who is not a citizen or resident of the United States. H&r block file for free If you are a nonresident alien, the rules discussed in this publication do not apply to you. H&r block file for free Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to a lower rate) by treaty. H&r block file for free You will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. H&r block file for free These forms will also show the tax rate and the amount of tax withheld from your benefits. H&r block file for free   Under tax treaties with the following countries, residents of these countries are exempt from U. H&r block file for free S. H&r block file for free tax on their benefits. H&r block file for free Canada. H&r block file for free Egypt. H&r block file for free Germany. H&r block file for free Ireland. H&r block file for free Israel. H&r block file for free Italy. H&r block file for free Japan. H&r block file for free Romania. H&r block file for free United Kingdom. H&r block file for free   Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U. H&r block file for free S. H&r block file for free tax if the benefits are for services performed for the United States, its subdivisions, or local government authorities. H&r block file for free   If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate. H&r block file for free   For more information on whether you are a nonresident alien, see Publication 519, U. H&r block file for free S. H&r block file for free Tax Guide for Aliens. H&r block file for free Exemption from withholding. H&r block file for free   If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed, the SSA will not withhold U. H&r block file for free S. H&r block file for free tax from your benefits. H&r block file for free   If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries listed, you can claim an exemption from withholding by filing Form RRB-1001 with the RRB. H&r block file for free Contact the RRB to get this form. H&r block file for free Canadian or German social security benefits paid to U. H&r block file for free S. H&r block file for free residents. H&r block file for free   Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U. H&r block file for free S. H&r block file for free residents are treated for U. H&r block file for free S. H&r block file for free income tax purposes as if they were paid under the social security legislation of the United States. H&r block file for free If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1, shown later. H&r block file for free How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. H&r block file for free You cannot use Form 1040EZ. H&r block file for free Reporting on Form 1040. H&r block file for free   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. H&r block file for free Reporting on Form 1040A. H&r block file for free   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. H&r block file for free Benefits not taxable. H&r block file for free   If you are filing Form 1040EZ, do not report any benefits on your tax return. H&r block file for free If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. H&r block file for free Generally, the higher that total amount, the greater the taxable part of your benefits. H&r block file for free Maximum taxable part. H&r block file for free   Generally, up to 50% of your benefits will be taxable. H&r block file for free However, up to 85% of your benefits can be taxable if either of the following situations applies to you. H&r block file for free The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). H&r block file for free You are married filing separately and lived with your spouse at any time during 2013. H&r block file for free Which worksheet to use. H&r block file for free   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. H&r block file for free You can use either that worksheet or Worksheet 1 in this publication, unless any of the following situations applies to you. H&r block file for free You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. H&r block file for free In this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. H&r block file for free Situation (1) does not apply and you take an exclusion for interest from qualified U. H&r block file for free S. H&r block file for free savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. H&r block file for free In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits. H&r block file for free You received a lump-sum payment for an earlier year. H&r block file for free In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in this publication. H&r block file for free See Lump-Sum Election , later. H&r block file for free Examples A few examples you can use as a guide to figure the taxable part of your benefits follow. H&r block file for free Filled-in Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free $5,980         2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 2,990     3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free 28,990     4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free -0-     5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free -0-     6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 31,980     7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free -0-     8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 31,980     9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free 25,000       Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free 6,980     11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free 9,000     12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free -0-     13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free 6,980     14. H&r block file for free Enter one-half of line 13 14. H&r block file for free 3,490     15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free 2,990     16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free -0-     17. H&r block file for free Add lines 15 and 16 17. H&r block file for free 2,990     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free 5,083     19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free $2,990       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Example 1. H&r block file for free George White is single and files Form 1040 for 2013. H&r block file for free In addition to receiving social security payments, he received a fully taxable pension of $18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. H&r block file for free He received a Form SSA-1099 in January 2014 that shows his net social security benefits of $5,980 in box 5. H&r block file for free   To figure his taxable benefits, George completes Worksheet 1, shown below. H&r block file for free On line 20a of his Form 1040, George enters his net benefits of $5,980. H&r block file for free On line 20b, he enters his taxable benefits of $2,990. H&r block file for free Example 2. H&r block file for free Ray and Alice Hopkins file a joint return on Form 1040A for 2013. H&r block file for free Ray is retired and received a fully taxable pension of $15,500. H&r block file for free He also received social security benefits and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. H&r block file for free Alice worked during the year and had wages of $14,000. H&r block file for free She made a deductible payment to her IRA account of $1,000. H&r block file for free Ray and Alice have two savings accounts with a total of $250 in taxable interest income. H&r block file for free They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. H&r block file for free They find none of Ray's social security benefits are taxable. H&r block file for free On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. H&r block file for free Filled-in Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free $5,600         2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 2,800     3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free 29,750     4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free -0-     5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free -0-     6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 32,550     7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free 1,000     8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 31,550     9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free 32,000       Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free       11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free       12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free       13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free       14. H&r block file for free Enter one-half of line 13 14. H&r block file for free       15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free       16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free       17. H&r block file for free Add lines 15 and 16 17. H&r block file for free       18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free       19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Example 3. H&r block file for free Joe and Betty Johnson file a joint return on Form 1040 for 2013. H&r block file for free Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. H&r block file for free Joe's Form RRB-1099 shows $10,000 in box 5. H&r block file for free Betty is a retired government worker and received a fully taxable pension of $38,000. H&r block file for free They had $2,300 in taxable interest income plus interest of $200 on a qualified U. H&r block file for free S. H&r block file for free savings bond. H&r block file for free The savings bond interest qualified for the exclusion. H&r block file for free They figure their taxable benefits by completing Worksheet 1 below. H&r block file for free Because they have qualified U. H&r block file for free S. H&r block file for free savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. H&r block file for free On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). H&r block file for free More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. H&r block file for free (See Maximum taxable part under How Much Is Taxable earlier. H&r block file for free ) Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. H&r block file for free Filled-in Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free $10,000         2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 5,000     3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free 40,500     4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free -0-     5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free -0-     6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 45,500     7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free -0-     8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 45,500     9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free 32,000       Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free 13,500     11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free 12,000     12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free 1,500     13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free 12,000     14. H&r block file for free Enter one-half of line 13 14. H&r block file for free 6,000     15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free 5,000     16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free 1,275     17. H&r block file for free Add lines 15 and 16 17. H&r block file for free 6,275     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free 8,500     19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free $6,275       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Filled-in Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free $4,000         2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 2,000     3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free 8,000     4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free -0-     5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free -0-     6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 10,000     7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free -0-     8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 10,000     9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free         Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free       11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free       12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free       13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free       14. H&r block file for free Enter one-half of line 13 14. H&r block file for free       15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free       16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free       17. H&r block file for free Add lines 15 and 16 17. H&r block file for free 8,500     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free 3,400     19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free $3,400       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Example 4. H&r block file for free Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2013. H&r block file for free Bill earned $8,000 during 2013. H&r block file for free The only other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). H&r block file for free Bill figures his taxable benefits by completing Worksheet 1 below. H&r block file for free He must include 85% of his social security benefits in his taxable income because he is married filing separately and lived with his spouse during 2013. H&r block file for free See How Much Is Taxable earlier. H&r block file for free Bill enters $4,000 on his Form 1040, line 20a, and $3,400 on Form 1040, line 20b. H&r block file for free Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. H&r block file for free This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. H&r block file for free No part of the lump-sum death benefit is subject to tax. H&r block file for free Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. H&r block file for free However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. H&r block file for free You can elect this method if it lowers your taxable benefits. H&r block file for free Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year's income. H&r block file for free Then you subtract any taxable benefits for that year that you previously reported. H&r block file for free The remainder is the taxable part of the lump-sum payment. H&r block file for free Add it to the taxable part of your benefits for 2013 (figured without the lump-sum payment for the earlier year). H&r block file for free Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. H&r block file for free Do not file an amended return for the earlier year. H&r block file for free Will the lump-sum election method lower your taxable benefits?   To find out, take the following steps. H&r block file for free Complete Worksheet 1 in this publication. H&r block file for free Complete Worksheet 2 and Worksheet 3 as appropriate. H&r block file for free Use Worksheet 2 if your lump-sum payment was for a year after 1993. H&r block file for free Use Worksheet 3 if it was for 1993 or an earlier year. H&r block file for free Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received the lump-sum payment. H&r block file for free Complete Worksheet 4. H&r block file for free Compare the taxable benefits on line 19 of Worksheet 1 with the taxable benefits on line 21 of Worksheet 4. H&r block file for free If the taxable benefits on Worksheet 4 are lower than the taxable benefits on Worksheet 1, you can elect to report the lower amount on your return. H&r block file for free Making the election. H&r block file for free   If you elect to report your taxable benefits under the lump-sum election method, follow the instructions at the bottom of Worksheet 4. H&r block file for free Do not attach the completed worksheets to your return. H&r block file for free Keep them with your records. H&r block file for free    Once you elect this method of figuring the taxable part of a lump-sum payment, you can revoke your election only with the consent of the IRS. H&r block file for free Lump-sum payment reported on Form SSA-1099 or RRB-1099. H&r block file for free   If you received a lump-sum payment in 2013 that includes benefits for one or more earlier years after 1983, it will be included in box 3 of either Form SSA-1099 or Form RRB-1099. H&r block file for free That part of any lump-sum payment for years before 1984 is not taxed and will not be shown on the form. H&r block file for free The form will also show the year (or years) the payment is for. H&r block file for free However, Form RRB-1099 will not show a breakdown by year (or years) of any lump-sum payment for years before 2011. H&r block file for free You must contact the RRB for a breakdown by year for any amount shown in box 9. H&r block file for free Example Jane Jackson is single. H&r block file for free In 2012 she applied for social security disability benefits but was told she was ineligible. H&r block file for free She appealed the decision and won. H&r block file for free In 2013, she received a lump-sum payment of $6,000, of which $2,000 was for 2012 and $4,000 was for 2013. H&r block file for free Jane also received $5,000 in social security benefits in 2013, so her total benefits in 2013 were $11,000. H&r block file for free Jane's other income for 2012 and 2013 is as follows. H&r block file for free   Income 2012 2013     Wages $20,000 $ 3,500     Interest income 2,000 2,500     Dividend income 1,000 1,500     Fully taxable pension   18,000     Total $23,000 $25,500   To see if the lump-sum election method results in lower taxable benefits, she completes Worksheets 1, 2, and 4 from this publication. H&r block file for free She does not need to complete Worksheet 3 because her lump-sum payment was for years after 1993. H&r block file for free Jane completes Worksheet 1 to find the amount of her taxable benefits for 2013 under the regular method. H&r block file for free She completes Worksheet 2 to find the taxable part of the lump-sum payment for 2012 under the lump-sum election method. H&r block file for free She completes Worksheet 4 to decide if the lump-sum election method will lower her taxable benefits. H&r block file for free After completing the worksheets, Jane compares the amounts from Worksheet 4, line 21, and Worksheet 1, line 19. H&r block file for free Because the amount on Worksheet 4 is smaller, she chooses to use the lump-sum election method. H&r block file for free To do this, she prints “LSE” to the left of Form 1040, line 20a. H&r block file for free She then enters $11,000 on Form 1040, line 20a, and her taxable benefits of $2,500 on line 20b. H&r block file for free Jane's filled-in worksheets (1, 2, and 4) follow. H&r block file for free Jane Jackson's Filled-in Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free $11,000         2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 5,500     3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free 25,500     4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free -0-     5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free -0-     6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 31,000     7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free -0-     8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 31,000     9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free 25,000       Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free 6,000     11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free 9,000     12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free -0-     13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free 6,000     14. H&r block file for free Enter one-half of line 13 14. H&r block file for free 3,000     15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free 3,000     16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free -0-     17. H&r block file for free Add lines 15 and 16 17. H&r block file for free 3,000     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free 9,350     19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free $3,000       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Jane Jackson's Filled-in Worksheet 2. H&r block file for free Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 2012 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. H&r block file for free $2,000           Note. H&r block file for free If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. H&r block file for free Otherwise, go on to line 2. H&r block file for free             2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 1,000   3. H&r block file for free Enter your adjusted gross income for the earlier year 3. H&r block file for free 23,000   4. H&r block file for free Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. H&r block file for free S. H&r block file for free savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. H&r block file for free -0-   5. H&r block file for free Enter any tax-exempt interest received in the earlier year 5. H&r block file for free -0-   6. H&r block file for free Add lines 2 through 5 6. H&r block file for free 24,000   7. H&r block file for free Enter your taxable benefits for the earlier year that you previously reported 7. H&r block file for free -0-   8. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 24,000   9. H&r block file for free If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. H&r block file for free 25,000     Note. H&r block file for free If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 8 more than the amount on line 9?       No. H&r block file for free Skip lines 10 through 20 and enter -0- on line 21. H&r block file for free       Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free     11. H&r block file for free Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. H&r block file for free     12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free     13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free     14. H&r block file for free Enter one-half of line 13 14. H&r block file for free     15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free     16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free     17. H&r block file for free Add lines 15 and 16 17. H&r block file for free     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free     19. H&r block file for free Refigured taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18 19. H&r block file for free     20. H&r block file for free Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. H&r block file for free     21. H&r block file for free Additional taxable benefits. H&r block file for free Subtract line 20 from line 19. H&r block file for free Also enter this amount on Worksheet 4, line 20 21. H&r block file for free -0-     Do not file an amended return for this earlier year. H&r block file for free Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. H&r block file for free   Jane Jackson's Filled-in Worksheet 4. H&r block file for free Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3)     Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this worksheet. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2013, minus the lump-sum payment for years before 2013 1. H&r block file for free $9,000         Note. H&r block file for free If line 1 is zero or less, skip lines 2 through 18, enter -0- on line 19 and go to line 20. H&r block file for free Otherwise, go on to line 2. H&r block file for free           2. H&r block file for free Enter one-half of line 1 2. H&r block file for free 4,500   3. H&r block file for free Enter the amount from Worksheet 1, line 3 3. H&r block file for free 25,500   4. H&r block file for free Enter the amount from Worksheet 1, line 4 4. H&r block file for free -0-   5. H&r block file for free Enter the amount from Worksheet 1, line 5 5. H&r block file for free -0-   6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free 30,000   7. H&r block file for free Enter the amount from Worksheet 1, line 7 7. H&r block file for free -0-   8. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free 30,000   9. H&r block file for free Enter the amount from Worksheet 1, line 9. H&r block file for free But if you are married filing separately and lived with your spouse at any time during 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then, go to line 18 9. H&r block file for free 25,000   10. H&r block file for free Is the amount on line 8 more than the amount on line 9? No. H&r block file for free Skip lines 10 through 18, enter -0- on line 19, and go to line 20. H&r block file for free  Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free 5,000   11. H&r block file for free Enter the amount from Worksheet 1, line 11 11. H&r block file for free 9,000   12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free -0-   13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free 5,000   14. H&r block file for free Enter one-half of line 13 14. H&r block file for free 2,500   15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free 2,500   16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free -0-   17. H&r block file for free Add lines 15 and 16 17. H&r block file for free 2,500   18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free 7,650   19. H&r block file for free Enter the smaller of line 17 or line 18 19. H&r block file for free 2,500   20. H&r block file for free Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all earlier years for which the lump-sum payment was received 20. H&r block file for free -0-   21. H&r block file for free Taxable benefits under lump-sum election method. H&r block file for free Add lines 19 and 20 21. H&r block file for free $2,500   Next. H&r block file for free Is line 21 above smaller than Worksheet 1, line 19? No. H&r block file for free Do not use this method to figure your taxable benefits. H&r block file for free Follow the instructions on Worksheet 1 to report your benefits. H&r block file for free  Yes. H&r block file for free You can elect to report your taxable benefits under this method. H&r block file for free To elect this method:     Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. H&r block file for free Otherwise: Enter the amount from Worksheet 1, line 1, on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free Enter the amount from line 21 above on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free   Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. H&r block file for free Disability payments. H&r block file for free   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. H&r block file for free If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. H&r block file for free If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. H&r block file for free Claim the deduction or credit in the same way explained under Repayment of benefits received in an earlier year in the section Repayments More Than Gross Benefits , later. H&r block file for free Legal expenses. H&r block file for free   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. H&r block file for free   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. H&r block file for free Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. H&r block file for free If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. H&r block file for free Do not use Worksheet 1 in this case. H&r block file for free If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. H&r block file for free If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. H&r block file for free Joint return. H&r block file for free   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. H&r block file for free You do this to get your net benefits when figuring if your combined benefits are taxable. H&r block file for free Example. H&r block file for free John and Mary file a joint return for 2013. H&r block file for free John received Form SSA-1099 showing $3,000 in box 5. H&r block file for free Mary also received Form SSA-1099 and the amount in box 5 was ($500). H&r block file for free John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. H&r block file for free Repayment of benefits received in an earlier year. H&r block file for free   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. H&r block file for free Deduction $3,000 or less. H&r block file for free   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. H&r block file for free Claim it on Schedule A (Form 1040), line 23. H&r block file for free Deduction more than $3,000. H&r block file for free   If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. H&r block file for free Figure your tax for 2013 in the following steps: Figure the tax without the itemized deduction included on Schedule A, line 28. H&r block file for free For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. H&r block file for free Then refigure the tax for that year. H&r block file for free Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. H&r block file for free Subtract the result in (c) from the result in (a). H&r block file for free   Compare the tax figured in methods (1) and (2). H&r block file for free Your tax for 2013 is the smaller of the two amounts. H&r block file for free If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. H&r block file for free If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. H&r block file for free Check box d and enter “I. H&r block file for free R. H&r block file for free C. H&r block file for free 1341” in the space next to that box. H&r block file for free If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. H&r block file for free Worksheets Blank Worksheets 1 through 4 are provided in this section: Worksheet 1, Figuring Your Taxable Benefits; Worksheet 2, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993); Worksheet 3, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994); Worksheet 4, Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3). H&r block file for free Worksheet 1. H&r block file for free Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. H&r block file for free Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). H&r block file for free None of your benefits are taxable for 2013. H&r block file for free For more information, see Repayments More Than Gross Benefits . H&r block file for free If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block file for free S. H&r block file for free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. H&r block file for free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block file for free 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block file for free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. H&r block file for free           2. H&r block file for free Enter one-half of line 1 2. H&r block file for free       3. H&r block file for free Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. H&r block file for free       4. H&r block file for free Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. H&r block file for free       5. H&r block file for free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. H&r block file for free       6. H&r block file for free Combine lines 2, 3, 4, and 5 6. H&r block file for free       7. H&r block file for free Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block file for free  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. H&r block file for free       8. H&r block file for free Is the amount on line 7 less than the amount on line 6?             No. H&r block file for free None of your social security benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block file for free             Yes. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free       9. H&r block file for free If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. H&r block file for free         Note. H&r block file for free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 9 less than the amount on line 8?             No. H&r block file for free None of your benefits are taxable. H&r block file for free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block file for free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. H&r block file for free             Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free       11. H&r block file for free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. H&r block file for free       12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free       13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free       14. H&r block file for free Enter one-half of line 13 14. H&r block file for free       15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free       16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free       17. H&r block file for free Add lines 15 and 16 17. H&r block file for free       18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free       19. H&r block file for free Taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18. H&r block file for free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. H&r block file for free         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. H&r block file for free         Worksheet 2. H&r block file for free Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. H&r block file for free             Note. H&r block file for free If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. H&r block file for free Otherwise, go on to line 2. H&r block file for free             2. H&r block file for free Enter one-half of line 1 2. H&r block file for free     3. H&r block file for free Enter your adjusted gross income for the earlier year 3. H&r block file for free     4. H&r block file for free Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. H&r block file for free S. H&r block file for free savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. H&r block file for free     5. H&r block file for free Enter any tax-exempt interest received in the earlier year 5. H&r block file for free     6. H&r block file for free Add lines 2 through 5 6. H&r block file for free     7. H&r block file for free Enter your taxable benefits for the earlier year that you previously reported 7. H&r block file for free     8. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free     9. H&r block file for free If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. H&r block file for free       Note. H&r block file for free If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. H&r block file for free 85) and enter the result on line 17. H&r block file for free Then go to line 18. H&r block file for free         10. H&r block file for free Is the amount on line 8 more than the amount on line 9?       No. H&r block file for free Skip lines 10 through 20 and enter -0- on line 21. H&r block file for free       Yes. H&r block file for free Subtract line 9 from line 8 10. H&r block file for free     11. H&r block file for free Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. H&r block file for free     12. H&r block file for free Subtract line 11 from line 10. H&r block file for free If zero or less, enter -0- 12. H&r block file for free     13. H&r block file for free Enter the smaller of line 10 or line 11 13. H&r block file for free     14. H&r block file for free Enter one-half of line 13 14. H&r block file for free     15. H&r block file for free Enter the smaller of line 2 or line 14 15. H&r block file for free     16. H&r block file for free Multiply line 12 by 85% (. H&r block file for free 85). H&r block file for free If line 12 is zero, enter -0- 16. H&r block file for free     17. H&r block file for free Add lines 15 and 16 17. H&r block file for free     18. H&r block file for free Multiply line 1 by 85% (. H&r block file for free 85) 18. H&r block file for free     19. H&r block file for free Refigured taxable benefits. H&r block file for free Enter the smaller of line 17 or line 18 19. H&r block file for free     20. H&r block file for free Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. H&r block file for free     21. H&r block file for free Additional taxable benefits. H&r block file for free Subtract line 20 from line 19. H&r block file for free Also enter this amount on Worksheet 4, line 20 21. H&r block file for free       Do not file an amended return for this earlier year. H&r block file for free Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. H&r block file for free   Worksheet 3. H&r block file for free Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994) Enter earlier year 1. H&r block file for free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. H&r block file for free           Note. H&r block file for free If line 1 is zero or less, skip lines 2 through 13 and enter -0- on line 14. H&r block file for free Otherwise, go on to line 2. H&r block file for free           2. H&r block file for free Enter one-half of line 1 2. H&r block file for free     3. H&r block file for free Enter your adjusted gross income for the earlier year 3. H&r block file for free     4. H&r block file for free Enter the total of any exclusions/adjustments you claimed in the earlier year for: Qualified U. H&r block file for free S. H&r block file for free savings bond interest (Form 8815) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. H&r block file for free     5. H&r block file for free Enter any tax-exempt interest received in the earlier year 5. H&r block file for free     6. H&r block file for free Add lines 2 through 5 6. H&r block file for free     7. H&r block file for free Enter your taxable benefits for the earlier year that you previously reported 7. H&r block file for free     8. H&r block file for free Subtract line 7 from line 6 8. H&r block file for free     9. H&r block file for free Enter $25,000 ($32,000 if married filing jointly for the earlier year; $-0- if married filing separately for the earlier year and you lived with your spouse at any time during the earlier year) 9. H&r block file for free     10. H&r block file for free Is the amount on line 8 more than the amount on line 9? No. H&r block file for free Skip lines 10 through 13 and enter -0- on line 14. H&r block file for free  Yes. H&r block file for free Subtract line 9 from line 8. H&r block file for free 10. H&r block file for free     11. H&r block file for free Enter one-half of line 10 11. H&r block file for free     12. H&r block file for free Refigured taxable benefits. H&r block file for free Enter the smaller of line 2 or line 11 12. H&r block file for free     13. H&r block file for free Enter your taxable benefits for the earlier year (or as refigured due to a previous
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Tax Information For Businesses

Small Business and Self-Employed Tax Center
Access to tax information useful to small businesses with assets of $10 million or less.

Large Business and International Tax Center
This page provides links which are helpful for large to mid-size businesses with assets greater than $10 million

Work Opportunity Tax Credit Extended
Businesses, including tax-exempt employers, may qualify for the Work Opportunity Tax Credit for qualified veterans hired before January 1, 2014.

Self-Employed Individuals Tax Center
The basics on your tax responsibilities if you are self-employed or an independent contractor.

Qualifying Advanced Energy Project Credit (section 48C)
Notice 2013-12, issued February 7, 2013, announced the availability of $150,228,397 in section 48C tax credits in the Phase II allocation round in 2013. Application procedures are different than in the first allocation round.

IRS Video Portal
The IRS Video portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals. You will find video clips of tax topics, and archived versions of live panel discussions and webinars.

Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations
The Balanced Budget and Emergency Deficit Reduction Act of 1985, as amended, requires certain spending cuts during Fiscal Year 2013 due to the sequester triggered earlier this year.

Alternative Motor Vehicle Credit
The Alternative Fuel Motor Vehicle Credit was enacted by the Energy Policy Act of 2005 and includes separate credits for four distinct categories of vehicles: Hybrid vehicles, Fuel Cell vehicles, Qualified Alternative Fuel Motor vehicles (QAFMV) and Advanced Lean Burn Technology vehicles. The amount of the potential credit varies by type of vehicle and which of the four credits applies.

Coordinated Issue Papers - LB&I
Effective January 21, 2014, all LB&I coordinated issue papers are decoordinated.  See 1/21/14 Directive from LB&I Commissioner Maloy for details.

HIRE Act: Questions and Answers for Employers
General information about the provisions of the Hiring Individuals to Restore Employment Act.

Employment Taxes
Federal income tax, Social Security and Medicare taxes, FUTA, self-employment tax and more.

Disaster Assistance and Emergency Relief for Individuals and Businesses
Special tax law provisions may help taxpayers and businesses recover financially from a disaster.

Small Business Forms and Publications
Download multiple small business and self-employed forms and publications.

e-file for Large Business and International (LB&I)
Certain large business and International (LB&I) corporations are required to electronically file their Forms 1120 and 1120S. Other corporations may do so voluntarily. This site provides e-file information for corporations that prepare and transmit their own electronic corporate income tax returns and those that use the services of third party tax professionals.

Employer ID Numbers (EINs)
Find out more on EINs or apply for one online.

Employee Tool & Equipment Plans
The Internal Revenue Service has established a compliance team to address the marketing and mistreatment of employee tool and equipment plans as tax-favored accountable plans.

Deducting Business Expenses
Find out what qualifies as a deductible business expense, including depreciation.

IRS Tax Calendar for Businesses and Self-Employed
The tax calendar is available for downloading and printing, or you can view it online.

U.S. Citizens and Resident Aliens Abroad
This section covers tax topics for U.S. citizens or resident aliens living overseas.

HCTC: Information for Health Plan Administrators (HPAs)
Health Plan Administrators are key to the success of the HCTC by providing health insurance to eligible individuals. Find information specific to health plan administrators here, including how to get involved and participate with the HCTC Program.

Excise Tax
Information about the various programs, databases, and activities within Excise Tax.

Industry Issue Resolution Program
The Industry Issue Resolution (IIR) Program resolves frequently disputed or burdensome tax issues. IRS solicits suggestions for issues for the program from taxpayers, representatives and associations.

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

Filing Past Due Tax Returns
Understand how to file past due returns.

Information Returns Processing
The Information Reporting Program Website is designed to help you meet your Information Reporting Requirements. Included are help-line telephone numbers and direct links to aid you in reporting information returns. You will also find information about how to file returns electronically or magnetically.

LB&I Directives
LB&I Directives provide industry-related and administrative guidance to LB&I examiners to ensure consistent tax administration. The Directives do not establish Service position on legal issues and are not legal guidance.

Online Ordering for Information Returns and Employer Returns
Order information returns and employer returns online.

Manufacturers' Energy Efficient Appliance Credit
Act Section 305 - Modifications of Energy Efficient Appliance Credit for Appliances Produced After 2007

Audit Techniques Guides (ATGs)
These guides contain examination techniques to assist examiners in performing examinations.

1099-K Reporting Requirements for Payment Settlement Entities
Describes responsibilities of 1099-K filers and provides links to forms and publications.

Plug-In Electric Drive Vehicle Credit (IRC 30D)
Plug-In Electric Drive Vehicle Credit (IRC 30D) - Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks.

Your Guide to an IRS Small Business Audit
Video series shows small business owners steps of an audit and answers questions about the process

Income from Abroad is Taxable
There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with bank accounts in Liechtenstein. The IRS' interest, however, extends beyond bank accounts in Liechtenstein to financial accounts anywhere in the world. The IRS reminds you to report your worldwide income on your U.S. tax return and lists the possible consequences of hiding income overseas.

Quality Examination Process
The Quality Examination Process (QEP) is a systematic approach for engaging and involving Large Business and International (LB&I) taxpayers in the tax examination process, from the earliest planning stages through resolution of all issues and completion of the case.

Market Segment Understandings (MSU)
The IRS and taxpayers in particular market segments, work together to improve tax compliance.

Railroad Retirement Tax Act (RRTA) Desk Guide (January 2009)
This Desk Reference Guide is intended as a resource tool to assist Revenue Agents who are assigned the examination of a railroad employer. The Guide was prepared presuming that the reader has already received employment tax training.

Federal Payment Levy Program
Certain federal payments (OPM, SSA, federal employee salaries, and federal employee travel) disbursed by the Department of the Treasury, Financial Management Service (FMS) may be subject to a 15 percent levy through the Federal Payment Levy Program (FPLP) to pay your delinquent tax debt. Find out your appeal rights and how to resolve any dispute.

Research Credit
Guidelines and audit technique guide are provided for field examiners on the examination of Research Credit cases.

The International Tax Gap
Find resources on this page pertaining to the international tax gap — the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. The tax gap can also be thought of as the sum of non-compliance with the tax law.

Uncertain Tax Positions - Schedule UTP
IRS finalized Schedule UTP & instructions for reporting uncertain tax positions by certain corporations.

IRS Non-Retaliation Policy
IRS has a zero-tolerance policy for retaliation and has had one in place since 1998.

Page Last Reviewed or Updated: 30-Mar-2014

The H&r Block File For Free

H&r block file for free 3. H&r block file for free   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. H&r block file for free Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. H&r block file for free Certain contracts held by a charitable remainder trust. H&r block file for free Excise Taxes. H&r block file for free Indoor tanning services. H&r block file for free Application for Recognition of ExemptionPolitical activity. H&r block file for free Private delivery service. H&r block file for free Amendments to organizing documents required. H&r block file for free How to show reasonable action and good faith. H&r block file for free Not acting reasonably and in good faith. H&r block file for free Prejudicing the interest of the Government. H&r block file for free Procedure for requesting extension. H&r block file for free More information. H&r block file for free Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. H&r block file for free Grass roots expenditures. H&r block file for free Lobbying nontaxable amount. H&r block file for free Grass roots nontaxable amount. H&r block file for free Organization that no longer qualifies. H&r block file for free Tax on organization. H&r block file for free Tax on managers. H&r block file for free Taxes on organizations. H&r block file for free Taxes on managers. H&r block file for free Political expenditures. H&r block file for free Correction of expenditure. H&r block file for free Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. H&r block file for free Religious. H&r block file for free Charitable. H&r block file for free Scientific. H&r block file for free Testing for public safety. H&r block file for free Literary. H&r block file for free Educational. H&r block file for free Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). H&r block file for free The prevention of cruelty to children or animals. H&r block file for free To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. H&r block file for free A trust is a fund or foundation and will qualify. H&r block file for free However, an individual or a partnership will not qualify. H&r block file for free Examples. H&r block file for free   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. H&r block file for free Child care organizations. H&r block file for free   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. H&r block file for free Instrumentalities. H&r block file for free   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). H&r block file for free Examples of a qualifying instrumentality might include state schools, universities, or hospitals. H&r block file for free However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. H&r block file for free A state or municipality itself does not qualify for exemption. H&r block file for free Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. H&r block file for free Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. H&r block file for free Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. H&r block file for free Fundraising events. H&r block file for free   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. H&r block file for free This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. H&r block file for free   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. H&r block file for free If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. H&r block file for free You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. H&r block file for free See Disclosure of Quid Pro Quo Contributions in chapter 2. H&r block file for free Exemption application not filed. H&r block file for free   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. H&r block file for free Separate fund—contributions that are deductible. H&r block file for free   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. H&r block file for free   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. H&r block file for free A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. H&r block file for free Personal benefit contracts. H&r block file for free   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. H&r block file for free   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. H&r block file for free Certain annuity contracts. H&r block file for free   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). H&r block file for free Certain contracts held by a charitable remainder trust. H&r block file for free   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. H&r block file for free Excise tax. H&r block file for free   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. H&r block file for free The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. H&r block file for free Excise Taxes. H&r block file for free   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. H&r block file for free Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. H&r block file for free Indoor tanning services. H&r block file for free   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. H&r block file for free For more information, go to IRS. H&r block file for free gov and select Affordable Care Act Tax Provisions. H&r block file for free Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. H&r block file for free For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. H&r block file for free See the organization headings that follow for specific information your organization may need to provide. H&r block file for free Form 1023. H&r block file for free   Your organization must file its application for recognition of exemption on Form 1023. H&r block file for free See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. H&r block file for free Some organizations are not required to file Form 1023. H&r block file for free See Organizations Not Required To File Form 1023, later. H&r block file for free    Additional information to help you complete your application can be found online. H&r block file for free Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. H&r block file for free See Exemption Requirements - Section 501(c)(3) Organizations. H&r block file for free   Form 1023 and accompanying statements must show that all of the following are true. H&r block file for free The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. H&r block file for free ) specified in the introduction to this chapter. H&r block file for free No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. H&r block file for free You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. H&r block file for free The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. H&r block file for free See Political activity, next, and Lobbying Expenditures , near the end of this chapter. H&r block file for free Political activity. H&r block file for free   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). H&r block file for free Such participation or intervention includes the publishing or distributing of statements. H&r block file for free   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. H&r block file for free Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. H&r block file for free Effective date of exemption. H&r block file for free   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. H&r block file for free These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. H&r block file for free If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. H&r block file for free Otherwise, exemption will be recognized only from the date of receipt. H&r block file for free The date of receipt is the date of the U. H&r block file for free S. H&r block file for free postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. H&r block file for free Private delivery service. H&r block file for free   If a private delivery service designated by the IRS, rather than the U. H&r block file for free S. H&r block file for free Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. H&r block file for free The following private delivery services have been designated by the IRS. H&r block file for free DHL Express (DHL): DHL “Same Day” Service. H&r block file for free Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. H&r block file for free United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. H&r block file for free M. H&r block file for free , UPS Worldwide Express Plus, and UPS Worldwide Express. H&r block file for free Amendments to organizing documents required. H&r block file for free   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. H&r block file for free If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. H&r block file for free Extensions of time for filing. H&r block file for free   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. H&r block file for free Automatic 12-month extension. H&r block file for free Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. H&r block file for free To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. H&r block file for free 9100-2. H&r block file for free ” Discretionary extensions. H&r block file for free An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. H&r block file for free How to show reasonable action and good faith. H&r block file for free   An organization acted reasonably and showed good faith if at least one of the following is true. H&r block file for free The organization requests relief before its failure to file is discovered by the IRS. H&r block file for free The organization failed to file because of intervening events beyond its control. H&r block file for free The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. H&r block file for free The organization reasonably relied upon the written advice of the IRS. H&r block file for free The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. H&r block file for free An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. H&r block file for free Not acting reasonably and in good faith. H&r block file for free   An organization has not acted reasonably and in good faith under the following circumstances. H&r block file for free It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. H&r block file for free It was informed of the requirement to file and related tax consequences, but chose not to file. H&r block file for free It uses hindsight in requesting relief. H&r block file for free The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. H&r block file for free Prejudicing the interest of the Government. H&r block file for free   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. H&r block file for free Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. H&r block file for free The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. H&r block file for free The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. H&r block file for free Procedure for requesting extension. H&r block file for free   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. H&r block file for free A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. H&r block file for free Any documents relevant to the application. H&r block file for free An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. H&r block file for free If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. H&r block file for free This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. H&r block file for free ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. H&r block file for free This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. H&r block file for free The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. H&r block file for free These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. H&r block file for free ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. H&r block file for free The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. H&r block file for free The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. H&r block file for free   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. H&r block file for free Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. H&r block file for free More information. H&r block file for free   For more information about these procedures, see Regulations sections 301. H&r block file for free 9100-1, 301. H&r block file for free 9100-2, 301. H&r block file for free 9100-3, Revenue Procedure 2013-4, section 6. H&r block file for free 04, 2013-1 I. H&r block file for free R. H&r block file for free B. H&r block file for free 126, and Revenue Procedure 2013-8, 2013-1 I. H&r block file for free R. H&r block file for free B. H&r block file for free 237. H&r block file for free See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. H&r block file for free Notification from the IRS. H&r block file for free   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. H&r block file for free Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. H&r block file for free These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. H&r block file for free Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). H&r block file for free These organizations are exempt automatically if they meet the requirements of section 501(c)(3). H&r block file for free Filing Form 1023 to establish exemption. H&r block file for free   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. H&r block file for free By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. H&r block file for free A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. H&r block file for free Private foundations. H&r block file for free   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. H&r block file for free Gross receipts test. H&r block file for free   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. H&r block file for free   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. H&r block file for free For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. H&r block file for free The organization must file Form 1023 within 90 days after the end of its second tax year. H&r block file for free   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. H&r block file for free However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. H&r block file for free Example. H&r block file for free   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. H&r block file for free It was incorporated on January 1, 2009, and files returns on a calendar-year basis. H&r block file for free It did not file a Form 1023. H&r block file for free The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. H&r block file for free Therefore, it did not have to file Form 1023 and is exempt for those years. H&r block file for free However, for 2010, 2011, and 2012 the total gross receipts were $15,900. H&r block file for free Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. H&r block file for free If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. H&r block file for free The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. H&r block file for free   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. H&r block file for free See the procedures for this extension discussed earlier. H&r block file for free Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. H&r block file for free This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. H&r block file for free Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. H&r block file for free These conditions for exemption are referred to as the organizational test. H&r block file for free Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. H&r block file for free Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). H&r block file for free The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. H&r block file for free Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. H&r block file for free Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. H&r block file for free In interpreting an organization's articles, the law of the state where the organization was created is controlling. H&r block file for free If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. H&r block file for free The following are examples illustrating the organizational test. H&r block file for free Example 1. H&r block file for free Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). H&r block file for free These articles appropriately limit the organization's purposes. H&r block file for free The organization meets the organizational test. H&r block file for free Example 2. H&r block file for free An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. H&r block file for free The organization will not be properly limited as to its purposes since all research is not scientific. H&r block file for free The organization does not meet the organizational test. H&r block file for free Example 3. H&r block file for free An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). H&r block file for free The organization meets the organizational test. H&r block file for free Example 4. H&r block file for free If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. H&r block file for free Example 5. H&r block file for free If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. H&r block file for free On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. H&r block file for free Example 6. H&r block file for free If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. H&r block file for free Such purposes are vague and may be accomplished other than in an exempt manner. H&r block file for free Example 7. H&r block file for free A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. H&r block file for free A hospital may or may not be exempt depending on the manner in which it is operated. H&r block file for free Example 8. H&r block file for free An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. H&r block file for free Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. H&r block file for free This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. H&r block file for free If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. H&r block file for free Dedication. H&r block file for free   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. H&r block file for free Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. H&r block file for free Distribution. H&r block file for free   Revenue Procedure 82-2, 1982-1 C. H&r block file for free B. H&r block file for free 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. H&r block file for free The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. H&r block file for free   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. H&r block file for free Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. H&r block file for free Sample articles of organization. H&r block file for free   See sample articles of organization in the Appendix in the back of this publication. H&r block file for free Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. H&r block file for free In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. H&r block file for free You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. H&r block file for free If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. H&r block file for free See also Private Schools , discussed later. H&r block file for free Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. H&r block file for free Advocacy of a position. H&r block file for free   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. H&r block file for free The mere presentation of unsupported opinion is not educational. H&r block file for free Method not educational. H&r block file for free   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). H&r block file for free The following factors may indicate that the method is not educational. H&r block file for free The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. H&r block file for free The facts that purport to support the viewpoint are distorted. H&r block file for free The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. H&r block file for free The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. H&r block file for free   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. H&r block file for free Qualifying organizations. H&r block file for free   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. H&r block file for free College book stores, cafeterias, restaurants, etc. H&r block file for free   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. H&r block file for free Alumni association. H&r block file for free   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. H&r block file for free If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . H&r block file for free Athletic organization. H&r block file for free   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. H&r block file for free If it is not so engaged, your organization may be exempt as a social club described in chapter 4. H&r block file for free Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. H&r block file for free If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. H&r block file for free Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. H&r block file for free The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. H&r block file for free (This information also must be projected, so far as may be feasible, for the next academic year. H&r block file for free ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. H&r block file for free A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. H&r block file for free A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. H&r block file for free The public school district and county in which the school is located. H&r block file for free How to determine racial composition. H&r block file for free   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. H&r block file for free Nevertheless, a statement of the method by which the racial composition was determined must be supplied. H&r block file for free The identity of individual students or members of the faculty and administrative staff should not be included with this information. H&r block file for free   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. H&r block file for free Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. H&r block file for free Also, the school must circulate information that clearly states the school's admission policies. H&r block file for free A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. H&r block file for free The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. H&r block file for free The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. H&r block file for free Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. H&r block file for free A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. H&r block file for free A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. H&r block file for free Policy statement. H&r block file for free   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. H&r block file for free Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. H&r block file for free Publicity requirement. H&r block file for free   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. H&r block file for free Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. H&r block file for free To satisfy this requirement, the school must use one of the following two methods. H&r block file for free Method one. H&r block file for free   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. H&r block file for free Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. H&r block file for free When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. H&r block file for free If this method is used, the notice must meet the following printing requirements. H&r block file for free It must appear in a section of the newspaper likely to be read by prospective students and their families. H&r block file for free It must occupy at least 3 column inches. H&r block file for free It must have its title printed in at least 12 point bold face type. H&r block file for free It must have the remaining text printed in at least 8 point type. H&r block file for free The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. H&r block file for free It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. H&r block file for free   Method two. H&r block file for free   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. H&r block file for free If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. H&r block file for free In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. H&r block file for free The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. H&r block file for free Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. H&r block file for free Exceptions. H&r block file for free   The publicity requirements will not apply in the following situations. H&r block file for free First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. H&r block file for free These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. H&r block file for free If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. H&r block file for free Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . H&r block file for free   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. H&r block file for free The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. H&r block file for free   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. H&r block file for free Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. H&r block file for free   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. H&r block file for free The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. H&r block file for free In this regard, it is each school's responsibility to determine whether either of the exceptions applies. H&r block file for free Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. H&r block file for free Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. H&r block file for free Facilities and programs. H&r block file for free   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. H&r block file for free Scholarship and loan programs. H&r block file for free   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. H&r block file for free This must be known throughout the general community being served by the school and should be referred to in its publicity. H&r block file for free Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. H&r block file for free Certification. H&r block file for free   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. H&r block file for free   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. H&r block file for free Recordkeeping requirements. H&r block file for free With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. H&r block file for free Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. H&r block file for free Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. H&r block file for free Copies of all materials used by or on behalf of the school to solicit contributions. H&r block file for free Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. H&r block file for free (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. H&r block file for free ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. H&r block file for free However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. H&r block file for free The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. H&r block file for free Similarly, the IRS does not require a school to keep records prohibited under state or federal law. H&r block file for free Exceptions. H&r block file for free   The school does not have to independently maintain these records for IRS use if both of the following are true. H&r block file for free Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. H&r block file for free The school maintains copies of these reports from which this information is readily obtainable. H&r block file for free If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. H&r block file for free Failure to maintain records. H&r block file for free   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. H&r block file for free Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. H&r block file for free However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. H&r block file for free Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). H&r block file for free Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. H&r block file for free Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. H&r block file for free Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. H&r block file for free The rest of this section contains a description of the information to be provided by certain specific organizations. H&r block file for free This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. H&r block file for free Each of the following organizations must submit the information described. H&r block file for free Charitable organization supporting education. H&r block file for free   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. H&r block file for free Scholarships. H&r block file for free   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. H&r block file for free Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. H&r block file for free How and by whom the recipients are or will be selected. H&r block file for free If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. H&r block file for free If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. H&r block file for free A copy of the scholarship application form and any brochures or literature describing the scholarship program. H&r block file for free Hospital. H&r block file for free   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. H&r block file for free   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. H&r block file for free You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. H&r block file for free Submit also an appraisal showing the fair rental value of the rented space. H&r block file for free Clinic. H&r block file for free   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. H&r block file for free Home for the aged. H&r block file for free   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. H&r block file for free Community nursing bureau. H&r block file for free   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. H&r block file for free Organization providing loans. H&r block file for free   If you make, or will make, loans for charitable and educational purposes, submit the following information. H&r block file for free An explanation of the circumstances under which such loans are, or will be, made. H&r block file for free Criteria for selection, including the rules of eligibility. H&r block file for free How and by whom the recipients are or will be selected. H&r block file for free Manner of repayment of the loan. H&r block file for free Security required, if any. H&r block file for free Interest charged, if any, and when payable. H&r block file for free Copies in duplicate of the loan application and any brochures or literature describing the loan program. H&r block file for free Public-interest law firms. H&r block file for free   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. H&r block file for free How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. H&r block file for free Whether the organization will accept fees for its services. H&r block file for free A description of the cases litigated or to be litigated and how they benefit the public generally. H&r block file for free Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. H&r block file for free Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. H&r block file for free Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. H&r block file for free Acceptance of attorneys' fees. H&r block file for free   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. H&r block file for free Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. H&r block file for free   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. H&r block file for free All fee awards must be paid to the organization and not to its individual staff attorneys. H&r block file for free Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. H&r block file for free Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. H&r block file for free   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. H&r block file for free   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. H&r block file for free Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. H&r block file for free That the particular religious beliefs of the organization are truly and sincerely held. H&r block file for free That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. H&r block file for free Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. H&r block file for free If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. H&r block file for free Churches. H&r block file for free   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. H&r block file for free In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. H&r block file for free   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. H&r block file for free Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. H&r block file for free The IRS considers the facts and circumstances of each organization applying for church status. H&r block file for free Convention or association of churches. H&r block file for free   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. H&r block file for free Integrated auxiliaries. H&r block file for free   An organization is an integrated auxiliary of a church if all the following are true. H&r block file for free The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). H&r block file for free It is affiliated with a church or a convention or association of churches. H&r block file for free It is internally supported. H&r block file for free An organization is internally supported unless both of the following are true. H&r block file for free It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). H&r block file for free It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. H&r block file for free Special rule. H&r block file for free   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. H&r block file for free   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. H&r block file for free   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. H&r block file for free Scientific Organizations You must show that your organization's research will be carried on in the public interest. H&r block file for free Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. H&r block file for free Aiding in the scientific education of college or university students. H&r block file for free Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th