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How To Do A Tax Amendment

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How To Do A Tax Amendment

How to do a tax amendment Publication 225 - Additional Material Prev  Up  Next   Home   More Online Publications
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Reminder To Home-Based Businesses: Simplified Option for Claiming Home Office Deduction Now Available; May Deduct up to $1,500; Saves 1.6 Million Hours A Year

IRS YouTube Video:

Simplified Home Office Deduction: English / Spanish / ASL

IR-2014-24, March 7, 2014

WASHINGTON — The Internal Revenue Service today reminded people with home-based businesses that this year for the first time they can choose a new simplified option for claiming the deduction for business use of a home.

In tax year 2011, the most recent year for which figures are available, some 3.3 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction) totaling nearly $10 billion.

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

The new option is available starting with the 2013 return taxpayers are filing now.  Normally, home-based businesses are required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions.  Instead, taxpayers claiming the optional deduction need only complete a short worksheet in the tax instructions and enter the result on their return. Self-employed individuals claim the home office deduction on Schedule C Line 30, farmers claim it on Schedule F  Line 32 and eligible employees claim it on Schedule A Line 21. 

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees, are still fully deductible.

Long-standing restrictions on the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

Further details on the home office deduction and the new option can be found in Publication 587, posted on IRS.gov.

 

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Page Last Reviewed or Updated: 07-Mar-2014

The How To Do A Tax Amendment

How to do a tax amendment 20. How to do a tax amendment   Standard Deduction Table of Contents What's New Introduction Standard Deduction Amount Standard Deduction for Dependents Who Should ItemizeWhen to itemize. How to do a tax amendment Married persons who filed separate returns. How to do a tax amendment What's New Standard deduction increased. How to do a tax amendment  The standard deduction for some taxpayers who do not itemize their deductions on Schedule A (Form 1040) is higher for 2013 than it was for 2012. How to do a tax amendment The amount depends on your filing status. How to do a tax amendment You can use the 2013 Standard Deduction Tables in this chapter to figure your standard deduction. How to do a tax amendment Introduction This chapter discusses the following topics. How to do a tax amendment How to figure the amount of your standard deduction. How to do a tax amendment The standard deduction for dependents. How to do a tax amendment Who should itemize deductions. How to do a tax amendment Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. How to do a tax amendment If you have a choice, you can use the method that gives you the lower tax. How to do a tax amendment The standard deduction is a dollar amount that reduces your taxable income. How to do a tax amendment It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A (Form 1040). How to do a tax amendment The standard deduction is higher for taxpayers who: Are 65 or older, or Are blind. How to do a tax amendment You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. How to do a tax amendment Persons not eligible for the standard deduction. How to do a tax amendment   Your standard deduction is zero and you should itemize any deductions you have if: Your filing status is married filing separately, and your spouse itemizes deductions on his or her return, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. How to do a tax amendment You are considered a dual-status alien if you were both a nonresident and resident alien during the year. How to do a tax amendment Note. How to do a tax amendment If you are a nonresident alien who is married to a U. How to do a tax amendment S. How to do a tax amendment citizen or resident alien at the end of the year, you can choose to be treated as a U. How to do a tax amendment S. How to do a tax amendment resident. How to do a tax amendment (See Publication 519, U. How to do a tax amendment S. How to do a tax amendment Tax Guide for Aliens. How to do a tax amendment ) If you make this choice, you can take the standard deduction. How to do a tax amendment If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction may be limited. How to do a tax amendment See Standard Deduction for Dependents, later. How to do a tax amendment Standard Deduction Amount The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. How to do a tax amendment Generally, the standard deduction amounts are adjusted each year for inflation. How to do a tax amendment The standard deduction amounts for most people are shown in Table 20-1. How to do a tax amendment Decedent's final return. How to do a tax amendment   The standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. How to do a tax amendment However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. How to do a tax amendment Higher Standard Deduction for Age (65 or Older) If you are age 65 or older on the last day of the year and do not itemize deductions, you are entitled to a higher standard deduction. How to do a tax amendment You are considered 65 on the day before your 65th birthday. How to do a tax amendment Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. How to do a tax amendment Use Table 20-2 to figure the standard deduction amount. How to do a tax amendment Higher Standard Deduction for Blindness If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. How to do a tax amendment Not totally blind. How to do a tax amendment   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is 20 degrees or less. How to do a tax amendment   If your eye condition is not likely to improve beyond these limits, the statement should include this fact. How to do a tax amendment You must keep the statement in your records. How to do a tax amendment   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. How to do a tax amendment Spouse 65 or Older or Blind You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and cannot be claimed as a dependent by another taxpayer. How to do a tax amendment You cannot claim the higher standard deduction for an individual other than yourself and your spouse. How to do a tax amendment Examples The following examples illustrate how to determine your standard deduction using Tables 20-1 and 20-2. How to do a tax amendment Example 1. How to do a tax amendment Larry, 46, and Donna, 33, are filing a joint return for 2013. How to do a tax amendment Neither is blind, and neither can be claimed as a dependent. How to do a tax amendment They decide not to itemize their deductions. How to do a tax amendment They use Table 20-1. How to do a tax amendment Their standard deduction is $12,200. How to do a tax amendment Example 2. How to do a tax amendment The facts are the same as in Example 1 except that Larry is blind at the end of 2013. How to do a tax amendment Larry and Donna use Table 20-2. How to do a tax amendment Their standard deduction is $13,400. How to do a tax amendment Example 3. How to do a tax amendment Bill and Lisa are filing a joint return for 2013. How to do a tax amendment Both are over age 65. How to do a tax amendment Neither is blind, and neither can be claimed as a dependent. How to do a tax amendment If they do not itemize deductions, they use Table 20-2. How to do a tax amendment Their standard deduction is $14,600. How to do a tax amendment Standard Deduction for Dependents The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). How to do a tax amendment However, if the individual is 65 or older or blind, the standard deduction may be higher. How to do a tax amendment If you (or your spouse, if filing jointly) can be claimed as a dependent on someone else's return, use Table 20-3 to determine your standard deduction. How to do a tax amendment Earned income defined. How to do a tax amendment   Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually perform. How to do a tax amendment    For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income. How to do a tax amendment See Scholarships and fellowships in chapter 12 for more information on what qualifies as a scholarship or fellowship grant. How to do a tax amendment Example 1. How to do a tax amendment Michael is single. How to do a tax amendment His parents can claim an exemption for him on their 2013 tax return. How to do a tax amendment He has interest income of $780 and wages of $150. How to do a tax amendment He has no itemized deductions. How to do a tax amendment Michael uses Table 20-3 to find his standard deduction. How to do a tax amendment He enters $150 (his earned income) on line 1, $500 ($150 + $350) on line 3, $1,000 (the larger of $500 and $1,000) on line 5, and $6,100 on line 6. How to do a tax amendment His standard deduction, on line 7a, is $1,000 (the smaller of $1,000 and $6,100). How to do a tax amendment Example 2. How to do a tax amendment Joe, a 22-year-old full-time college student, can be claimed as a dependent on his parents' 2013 tax return. How to do a tax amendment Joe is married and files a separate return. How to do a tax amendment His wife does not itemize deductions on her separate return. How to do a tax amendment Joe has $1,500 in interest income and wages of $3,800. How to do a tax amendment He has no itemized deductions. How to do a tax amendment Joe finds his standard deduction by using Table 20-3. How to do a tax amendment He enters his earned income, $3,800 on line 1. How to do a tax amendment He adds lines 1 and 2 and enters $4,150 on line 3. How to do a tax amendment On line 5, he enters $4,150, the larger of lines 3 and 4. How to do a tax amendment Because Joe is married filing a separate return, he enters $6,100 on line 6. How to do a tax amendment On line 7a he enters $4,150 as his standard deduction because it is smaller than $6,100, the amount on line 6. How to do a tax amendment Example 3. How to do a tax amendment Amy, who is single, can be claimed as a dependent on her parents' 2013 tax return. How to do a tax amendment She is 18 years old and blind. How to do a tax amendment She has interest income of $1,300 and wages of $2,900. How to do a tax amendment She has no itemized deductions. How to do a tax amendment Amy uses Table 20-3 to find her standard deduction. How to do a tax amendment She enters her wages of $2,900 on line 1. How to do a tax amendment She adds lines 1 and 2 and enters $3,250 on line 3. How to do a tax amendment On line 5, she enters $3,250, the larger of lines 3 and 4. How to do a tax amendment Because she is single, Amy enters $6,100 on line 6. How to do a tax amendment She enters $3,250 on line 7a. How to do a tax amendment This is the smaller of the amounts on lines 5 and 6. How to do a tax amendment Because she checked one box in the top part of the worksheet, she enters $1,500 on line 7b. How to do a tax amendment She then adds the amounts on lines 7a and 7b and enters her standard deduction of $4,750 on line 7c. How to do a tax amendment Example 4. How to do a tax amendment Ed is single. How to do a tax amendment His parents can claim an exemption for him on their 2013 tax return. How to do a tax amendment He has wages of $7,000, interest income of $500, and a business loss of $3,000. How to do a tax amendment He has no itemized deductions. How to do a tax amendment Ed uses Table 20-3 to figure his standard deduction. How to do a tax amendment He enters $4,000 ($7,000 - $3,000) on line 1. How to do a tax amendment He adds lines 1 and 2 and enters $4,350 on line 3. How to do a tax amendment On line 5 he enters $4,350, the larger of lines 3 and 4. How to do a tax amendment Because he is single, Ed enters $6,100 on line 6. How to do a tax amendment On line 7a he enters $4,350 as his standard deduction because it is smaller than $6,100, the amount on line 6. How to do a tax amendment Who Should Itemize You should itemize deductions if your total deductions are more than the standard deduction amount. How to do a tax amendment Also, you should itemize if you do not qualify for the standard deduction, as discussed earlier under Persons not eligible for the standard deduction . How to do a tax amendment You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using the method that gives you the greater benefit. How to do a tax amendment You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than: $250,000 if single ($275,000 if head of household, $300,000 if married filing jointly or qualifying widow(er); or $150,000 if married filing separately). How to do a tax amendment See chapter 29 or the instructions for Schedule A (Form 1040) for more information on figuring the correct amount of your itemized deductions. How to do a tax amendment When to itemize. How to do a tax amendment   You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Do not qualify for the standard deduction, or the amount you can claim is limited, Had large uninsured medical and dental expenses during the year, Paid interest and taxes on your home, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities, or Have total itemized deductions that are more than the standard deduction to which you otherwise are entitled. How to do a tax amendment These deductions are explained in chapters 21–28. How to do a tax amendment    If you decide to itemize your deductions, complete Schedule A and attach it to your Form 1040. How to do a tax amendment Enter the amount from Schedule A, line 29, on Form 1040, line 40. How to do a tax amendment Electing to itemize for state tax or other purposes. How to do a tax amendment   Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal return rather than take the standard deduction. How to do a tax amendment You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. How to do a tax amendment To make this election, you must check the box on line 30 of Schedule A. How to do a tax amendment Changing your mind. How to do a tax amendment   If you do not itemize your deductions and later find that you should have itemized — or if you itemize your deductions and later find you should not have — you can change your return by filing Form 1040X, Amended U. How to do a tax amendment S. How to do a tax amendment Individual Income Tax Return. How to do a tax amendment See Amended Returns and Claims for Refund in chapter 1 for more information on amended returns. How to do a tax amendment Married persons who filed separate returns. How to do a tax amendment   You can change methods of taking deductions only if you and your spouse both make the same changes. How to do a tax amendment Both of you must file a consent to assessment for any additional tax either one may owe as a result of the change. How to do a tax amendment    You and your spouse can use the method that gives you the lower total tax, even though one of you may pay more tax than you would have paid by using the other method. How to do a tax amendment You both must use the same method of claiming deductions. How to do a tax amendment If one itemizes deductions, the other should itemize because he or she will not qualify for the standard deduction. How to do a tax amendment See Persons not eligible for the standard deduction , earlier. How to do a tax amendment 2013 Standard Deduction Tables If you are married filing a separate return and your spouse itemizes deductions, or if you are a dual-status alien, you cannot take the standard deduction even if you were born before January 2, 1949, or are blind. How to do a tax amendment Table 20-1. How to do a tax amendment Standard Deduction Chart for Most People* If your filing status is. How to do a tax amendment . How to do a tax amendment . How to do a tax amendment Your standard deduction is: Single or Married filing separately $6,100 Married filing jointly or Qualifying widow(er) with dependent child 12,200 Head of household 8,950 *Do not use this chart if you were born before January 2, 1949, are blind, or if someone else can claim you (or your spouse if filing jointly) as a dependent. How to do a tax amendment Use Table 20-2 or 20-3 instead. How to do a tax amendment Table 20-2. How to do a tax amendment Standard Deduction Chart for People Born Before January 2, 1949, or Who are Blind Check the correct number of boxes below. How to do a tax amendment Then go to the chart. How to do a tax amendment You: Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked   IF  your filing status is. How to do a tax amendment . How to do a tax amendment . How to do a tax amendment AND the number in the box above is. How to do a tax amendment . How to do a tax amendment . How to do a tax amendment THEN your standard deduction is. How to do a tax amendment . How to do a tax amendment . How to do a tax amendment Single 1 $7,600   2 9,100 Married filing jointly 1 $13,400 or Qualifying 2 14,600 widow(er) with 3 15,800 dependent child 4 17,000 Married filing 1 $7,300 separately 2 8,500   3 9,700   4 10,900 Head of household 1 $10,450   2 11,950 *If someone else can claim you (or your spouse if filing jointly) as a dependent, use Table 20-3 instead. How to do a tax amendment Table 20-3. How to do a tax amendment Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse if filing jointly) as a dependent. How to do a tax amendment Check the correct number of boxes below. How to do a tax amendment Then go to the worksheet. How to do a tax amendment You:   Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked 1. How to do a tax amendment Enter your earned income (defined below). How to do a tax amendment If none, enter -0-. How to do a tax amendment 1. How to do a tax amendment   2. How to do a tax amendment Additional amount. How to do a tax amendment 2. How to do a tax amendment $350 3. How to do a tax amendment Add lines 1 and 2. How to do a tax amendment 3. How to do a tax amendment   4. How to do a tax amendment Minimum standard deduction. How to do a tax amendment 4. How to do a tax amendment $1,000 5. How to do a tax amendment Enter the larger of line 3 or line 4. How to do a tax amendment 5. How to do a tax amendment   6. How to do a tax amendment Enter the amount shown below for your filing status. How to do a tax amendment Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 6. How to do a tax amendment   7. How to do a tax amendment Standard deduction. How to do a tax amendment         a. How to do a tax amendment Enter the smaller of line 5 or line 6. How to do a tax amendment If born after January 1, 1949, and not blind, stop here. How to do a tax amendment This is your standard deduction. How to do a tax amendment Otherwise, go on to line 7b. How to do a tax amendment 7a. How to do a tax amendment     b. How to do a tax amendment If born before January 2, 1949, or blind, multiply $1,500 ($1,200 if married) by the number in the box above. How to do a tax amendment 7b. How to do a tax amendment     c. How to do a tax amendment Add lines 7a and 7b. How to do a tax amendment This is your standard deduction for 2013. How to do a tax amendment 7c. How to do a tax amendment   Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. How to do a tax amendment It also includes any amount received as a scholarship that you must include in your income. How to do a tax amendment Prev  Up  Next   Home   More Online Publications